IMF allocates further $42.3mn tranche to Georgia

TBILISI: The IMF said on Thursday it had approved a further $42.25 million loan to Georgia after it carried out structural reforms to support private sector development, improve fiscal performance and implement infrastructure projects.

The credit is the third tranche under a three-year, International Monetary Fund programme totalling $285 million, bringing total disbursements to $130 million.

Georgia, a major conduit for Caspian oil and gas to Europe, has even recovering from falling exports and a plunge in the currencies of its main trading partners Russia, Turkey and Azerbaijan, which depressed economic growth in recent years.

"Georgia has made notable progress under the IMF-supported programme," Tao Zhang, IMF Deputy Managing Director and Acting Chair, said after discussions by the fund's executive board.

"All end-December quantitative performance criteria were met, most with significant margins, while most structural benchmarks have been implemented," he said in a statement.

Zhang said that the former Soviet republic's economic growth had been stronger than initially envisaged, inflation had declined, the fiscal and external positions had improved, and public debt continued to diminish.

Important progress had also been made in implementing the structural reform agenda, but Georgia remained vulnerable to external shocks, including market volatility in major trading partners.

"Prudent macroeconomic policies and implementation of structural reforms are critical to address remaining vulnerabilities and promote higher and more inclusive growth," Zhang said.