IMF lowers economic growth forecast for Georgia
By Natalia Kochiashvili
Wednesday, April 7
The International Monetary Fund (IMF) has cut its economic growth forecast for Georgia - the organization expects only a 3.5% recovery in the country this year, when the previous forecast was for 4.3% growth. The Georgian government maintains a 4.3% growth forecast.
According to the report, 5.8% economic growth is expected in the country in 2022, and 5.5% economic growth is expected in 2023. The Georgian government has a similar forecast for growth in 2022 and 2023.
If economic activity is lower than the prediction for this year, the volume of tax revenues in the 2021 budget may be threatened.
According to the World Bank, the Georgian economy is unlikely to recover to the pre-Covid level by the end of 2022.
On April 6, the government took GEL35 million domestic debt today and the banks were ready to buy GEL91 million worth of securities.
The Georgian government receives domestic debt from the local economy by issuing treasury bonds and treasury bonds. This financial resource is purchased by commercial banks from the state. With the increase in the refinancing rate by the National Bank of Georgia (NBG), the domestic debt of the state has become more expensive.
Alexander Dzneladze, President of the Banking Association, explained that as a result of the NBG's decision to increase refinancing by 50 basis points in March to 8.5%, banks' interest in government bonds will increase.
Besides, 2-year securities with a face value of GEL20 million were sold at the Treasury Bill Auction of the Ministry of Finance yesterday. According to NBG, the demand for securities was GEL45 million. The minimum interest rate was 8.500%, maximum-8,580%, and the average weighted interest rate was set at 8,542%. The coupon interest rate was 8%. The coupon will be paid twice a year.
182-day GEL15 million securities were also sold at the Treasury Bill Auction on Tuesday. The demand for it amounted to GEL46 million.
