Georgia's credit rating remains at 'BB' level at Fitch Ratings
By Nika Gamtsemlidze
Monday, August 17
Influential rating agency Fitch has left Georgia's sovereign credit rating and rating outlook unchanged at the ‘BB’ level. According to the Ministry of Economy, Fitch's August 2020 report on Georgia's sovereign rating reflects the rating company's positive assessment of Georgia's economic policy, business environment, institutional strength, and quality of governance.
According to the report of the rating agency, a reliable and consistent policy framework has contributed to the resilience of the Georgian economy to shocks, maintaining macroeconomic stability, and reducing the risks of the current account deficit.
At the same time, according to the rating company, a real 4.8% decline in the economy is expected in 2020, and in 2021 the economy will recover and grow by 4.5%. According to the report, the steps taken to stop Covid-19 from further spreading helped the economic recovery.
As the latest data says, the economy shrank by 7.7% in June, which is a significant improvement compared to the first few months of the year when the whole economy was on hold. As of now, during the year, the economy has shrunk by 5.8 % in total. According to Fitch, domestic demand is expected to recover in the second half, which will be significantly driven by an increase in public capital expenditures.
“Against the background of the pandemic and the problems in the global economy, credit ratings in the world are expected to deteriorate, however, the credit organization Fitch assessed the Georgian economy and maintained the credit rating at 'BB.' This is an indicator that was taken about a year ago and today we have maintained this indicator. The factors highlighted by this rating organization are very important. Specifically, it is the high level of macroeconomic management that has helped maintain our ratings,” reads the report.
Naturally, this is a signal to investors that the Fitch report emphasizes that macroeconomic governance and stability in Georgia are at a high level.
Ekaterine Mikabadze, First Deputy Minister of Economy and Sustainable Development, noted that the Agency's assessment focuses on Georgia's cooperation with the International Monetary Fund (IMF), with which, according to her, the continuation of the program until April 2021 is a positive factor.
Fitch Ratings is an American credit rating agency and is one of the "Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations designated by the U.S. Securities and Exchange Commission in 1975.
