Georgian external debt increases

Georgia’s external state debt and credit liabilities have increased according to March 2009 data and are now USD 2.575 billion. This acute increase in liabilities is confirmed by the Ministry of Finance. The Ministry says there are several reasons for the debt increase, in particular the fact that Georgia bought bonds at the London stock exchange for USD 500 million and the GEL rate has subsequently fallen 25% against the USD.

Georgia’s bilateral liabilities and debts to other countries are more than USD 0.5 billion whereas its debt to international financial institutions is over USD 1.5 billion. Independent experts think that paying off these debts could pose serious problems for Georgia, particularly in the current crisis situation. Servicing the interest on these debts is also a heavy burden.