By Libby George
VIENNA (Reuters) – Georgia is aiming for a new programme with the International Monetary Fund and hopes to meet with the lender in February, the country’s deputy finance minister told Reuters.
The three-year $289 million Stand-By Arrangement (SBA), agreed June 2022, has been on hold since June 2023 after a push to amend legislation to change the management structure at the central bank raised questions over its independence. SBAs provide short-term financial assistance to countries facing balance of payments problems.
“We definitely want to go back on track…most probably a new programme because the current one is on its final turn,” said Deputy Minister of Finance Ekaterine Guntsadze.
Speaking on the sidelines of the Invisso Central & Eastern European Forum, Guntsadze said talks during a staff visit by the Fund to the country or a virtual mission could “kick-start” the next stage of their relationship.
An IMF programme could reassure investors in Georgia – a country of 3.7 million people, which until 1991 was ruled from Moscow as part of the Soviet Union and which stands at a crossroads in its international relations.
Its international bonds have been on a roller coaster this year, coming under pressure when the ruling Georgian Dream party won an October election, which sparked widespread protests.
Opponents of Georgian Dream say it wants to steer the Caucasus nation away from Europe and back into Russia’s orbit. But the government says it wants to protect the country from subversive foreign influence and from being dragged into war with Russia like Ukraine.
The European Union has frozen Georgia’s membership application because of concerns about its democratic decline.
Guntsadze said she was optimistic the country would be able to agree another programme with the IMF thanks to Georgia outperforming on a macro-fiscal level and enjoying the stability and consolidation the IMF requires.
However, there were still some structural issues that must be worked out with the Fund and the government is keen to find “some clear path” to address any of the lender’s political concerns as well, she added.
(Reporting By Libby George, writing by Karin Strohecker, editing by Sharon Singleton)
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