BAKU, Azerbaijan, March 9
By Tamilla Mammadova – Trend:
Georgia has seen a sharp 6.1 percent economic downturn, but Georgia is not alone in this difficult situation, said S&P Global analyst Aarti Sakuja, Trend reports via Georgian media.
"Consequently, the financial and monetary policy reacted significantly to this crisis, which served as a buffer for the country's economy. Despite the fact that the country lost a significant inflow of foreign exchange, this decline did not affect foreign exchange reserves. This was made possible by attracted funds from international financial institutions. Therefore, despite some adjustments, we have not seen a balance of payments crisis in Georgia," he said.
According to him, vulnerability to external debt has increased, but the country has the potential to generate foreign exchange earnings to service its debt. However, due to the decline in tourism revenues, this opportunity was weakened, which was one of the reasons for the "negative" expectations.
"We see heightened risks associated with an increase in the debt burden in Georgia. Last year alone, the level of debt rose by 20 percentage points. However, by the end of this year, debt is expected to rise to 70 percent. This is quite a significant increase compared to the 40 percent that was accounted for by government debt in 2019. However, on the other hand, the positive thing is that the maturity of the debt is quite long," Sakuja noted.
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