IMF, Georgia Agree on USD 750 mln Loan
The International Monetary Fund (IMF) said on September 3 it had “agreed in principle” with the Georgian authorities on a USD 750 million financial package in the form of an 18-month stand-by arrangement.
The proposed arrangement requires the approval of the IMF Executive Board, which is expected to consider Georgia’s request in mid-September.
The IMF said the arrangement was intended to support “the economic policies of the Georgian authorities and to help mitigate the adverse economic and financial consequences of the recent conflict.”
Eka Sharashidze, the Georgian economy minister, said on September 3 that the government had revised economic growth forecasts for 2008.
“Because of the war, we expect economic growth to slow to 5-6% from our initial estimate of double-digit growth,” she told journalists.
“Georgia’s strong record of reform and sound macroeconomic policies has strengthened the resilience of the economy and bodes well for a solid recovery from this shock,” The IMF, whose mission visited Georgia on August 23-September 3, said in a statement.
“The main objectives of the Stand-By Arrangement are to cover part of the expected temporary external financing gap, and to help sustain the confidence of markets and investors by supporting policies that will ensure continued macroeconomic stability and promote the recovery of private sector investment and economic growth.”
Kakha Bendukidze, chief of the government’s administration, who once served as state minister in charge of economic reforms, said in an interview with the Georgian weekly Kviris Palitra this week that the Georgian economy hadn’t collapsed and it had proved to be very flexible as a result of reforms carried out in recent years.
