Servicing Georgia’s loans could be problematic

A special item of servicing state loans is set out in the 2011 budget, with GEL 315 million allotted, which is GEL 86 million more than in 2010. Currently every Georgian citizen spends USD 2000 servicing this debt or put another way, 4% of state budget is spent on the debt. Looking at it from this point of view, 2013 will be the most difficult year as servicing the loans will take 14% of the budget that is provided the country hasn’t taken out any further loans before then. According to the current data, in 2013 Georgia will have to pay USD 800 million to cover the debt and analysts think that the Georgian government will try to do this by borrowing yet more money. Obviously this will not solve the problem – the burden will become more severe and simply postponed for the future.