IMF reaches interim agreement with Georgia to release USD 30 million markets

WASHINGTON: The International Monetary Fund said Monday it has reached an agreement with Georgia that will allow for a $30 million disbursement once approved by the global lender’s board.

IMF staffers met with Georgian authorities in Tbilisi from Oct. 26 to Nov. 7 and agreed on guidelines to complete the first review of Georgia’s stand-by arrangement, the IMF said in a statement.

The board is expected to review the deal in December. Georgia has a three-year, $289 million stand-by arrangement with the IMF, and the $30 million is the first disbursement.

IMF Head of Mission James John said Georgia’s economy performed strongly in 2022, with Russia’s war in Ukraine having less adverse effects than expected.

Georgia is expected to grow by 10% in 2022, down slightly from 10.4% in 2021 but well above the 3% rate forecast after the start of the war, he said. Inflation is estimated at 10.5% this year, but both growth and inflation should slow in 2023.

John said buoyant tourism revenues, a war-induced surge in immigration and financial inflows, and a surge in transit trade through Georgia have boosted economic output and tax revenues.

Given the high level of uncertainty, including around global economic and financial developments, he said the Georgian authorities should remain firmly focused on maintaining macroeconomic stability and pursuing structural reforms.

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“Fiscal policy rightly focuses on buffer building and risk management.

Agencies are saving some of the windfall revenue and will have a much smaller deficit in 2022 than expected when the SBA was approved in June,” John said.

Further tax adjustments are planned for 2023.