Fitch ratings affirms Georgia at BB
By Nika Gamtsemlidze
Monday, February 15
Fitch Ratings has affirmed Georgia's rating at BB with a negative outlook. According to the decision of the company, the rating of the country was supported by strong structural indicators, governance and business environment.
As the statement reads, a consistent and credible policy framework makes the country relatively resilient to different types of shocks. As for the negative outlook, it largely reflects the significant impact of the coronavirus pandemic on the economy of the country.
The ongoing pandemic had a huge impact on the small open economy of the country, which largely relied on the tourism sector. The company also forecasts real GDP growth of about 4.3% in 2021, and 5.8% in 2022.
Fitch Ratings also projected faster economic recovery in the country especially compared to the medial growth rates of its BB peers, which is on average 4.0% in 2021, and 3.7% in 2022.
The Prime Minister Giorgi Gakharia commented on the statement of Fitch Ratings, noting that the decision asserts that the re-election of Georgian Dream “reinforced Economic policy continuity with no disruption, despite high political tensions given the current boycott of parliament by opposition,” twitted the Prime Minister.
According to the statement, the current account deficit of Georgia is estimated to have widened to 12% of GDP in 2020 from 5.5% in 2019. The statement also noted that the exports fell less than expected, which was helped by a relatively well diversified base of trading partners.
As for the services exports, it was largely affected by the halt to inward tourism. for 2021, Fitch forecasts that the account deficit of the country will widen up to 12.5% in 2021 and will narrow to 7.9% in 2022.
The Fitch Ratings noted that the re-election of the Georgian Dream reinforces the expectations of economic policy continuity and the company does not see this being disrupted.
“Georgia's governance and ease of doing business indicators outperform the median percentile of its BB peers.”
Fitch Ratings is an American credit rating agency and is one of the three biggest 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.
