Fitch revises Georgia’s Outlook from negative to stable
By Khatia Bzhalava
Tuesday, August 10
Fitch Ratings has revised the Outlook on Georgia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and maintained its sovereign credit rating at BB. According to Fitch Rating, the Outlook revision reflects a much-improved macroeconomic baseline and Fitch’s confidence that the Georgian authorities will continue carrying out policies supporting macroeconomic stability and medium-term sustainability of public finances.
As Fitch reports, despite the country being severely damaged by the pandemic, Georgia navigated an external shock well. “This year’s projected strong economic recovery will help government debt to start declining, while accumulated fiscal buffers will help limit pandemic-related risks,” Fitch Rating states.
As it is said in Fitch’s statement, ‘Georgia's economic recovery has gained surprising momentum’ as real GDP growth in the first six months of 2021 increased by 12.7%.
According to Fitch’s forecast, Georgia's government debt ratio peaked in 2020 at 60% of GDP, declined to 56.0% this year and will decrease to 55.2% in 2023.
The Prime Minister of Georgia commented on the revised outlook of Fitch, saying that “Georgia has practically returned to its pre-pandemic indicator with the released ratings”. PM notes that Fitch Ratings has upgraded the country’s economic growth projection to 7.8% against the background of a higher-than-expected economic performance. As Garibashvili noted, the goal is to reach an investment rating by 2025, which is only 2 steps away from Georgia’s current status.
“Decision made by Fitch Ratings is believed to be a significant message to international investors on the quick economic recovery witnessed in the country" the PM stated.
According to Minister of Economy Natia Turnava, the revised outlook of Fitch Rating reflects increased confidence from international investors in Georgia.
“This is a very good precondition for us to have very high economic growth at the end of the year, to completely eliminate the damage of the previous year, and to maintain the position of economic growth leader in the region,” the Economy Minister stated.
