Georgia’s foreign debt continues to increase

According to the figures of July 31 Georgia’s foreign debt is 5 billion 145 million 973 thousand lari. Last July 31 it was 3 billion, 341 million, 761 thousand lari. This August it also became known that Georgia will receive an extra loan of USD 423.5 million from the IMF and one of USD 30 million from the Asian Development Bank. When these are added Georgia’s foreign debt will come very close to GEL 6 billion.

The Georgian Government does not consider this figure alarming, saying it is normal during a crisis period and all countries are taking loans. However independent analysts are deeply concerned by it. When even former Minister of Economy Kakha Bendukidze criticised the foreign debt increase recently he caused a sensation. “During the recent period foreign loans have reached such a level that the country might face problems paying them back,” he stated. About a year ago Kakha Bendukidze was the one promoting issuing Georgian state Eurobonds worth USD 500 million.

Analysts think that the problem is not taking loans as such but investing this money in non-productive sectors to defray the country’s internal liabilities instead of enterprises, industry, agriculture and so on. The money is often spent on purchasing and importing goods from abroad, meaning that Georgia is supporting foreign countries’ economies with loans granted to support its economy.