IMF Completes Final Review under Stand-By Arrangement for Georgia
OREANDA-NEWS. June 10, 2011. On June 8, 2011, the Executive Board of the International Monetary Fund (IMF) completed the ninth and final review of
In completing the review, the Board approved a waiver for the nonobservance of the performance criterion related to government expenditure.
Following the Executive Board’s discussion on
“The Georgian authorities are to be commended for successfully implementing the SBA-supported program. The program objectives have been largely achieved, evidenced by the rebound in economic activity, improved market confidence, and the recovery of international reserves to their pre-crisis level. At the same time, the external adjustment process is not yet complete; public debt should be reduced further; and growth needs to be sustained to reduce unemployment. It will be important for the authorities’ medium-term policy framework to address decisively these challenges.
“The authorities are firmly committed to fiscal consolidation. It will be important to preserve sufficient flexibility to introduce revenue-enhancing measures, should the need arise. Moreover, the planned increase in pensions should be structured and financed in a way that does not compromise the fiscal objectives.
“The authorities’ current monetary policy stance is appropriate in the absence of second-round effects from the food and fuel price hikes. The authorities stand ready to adjust this stance promptly if signs of more persistent inflation emerge. The enhanced exchange rate flexibility achieved over the course of the program is commendable and should remain an anchor of the authorities’ economic strategy.
“The banking sector has largely overcome the stress from the 2008 conflict and global financial crisis. Close monitoring for any signs of emerging new vulnerabilities in the sector will be important. The steps taken by the supervisory authority to strengthen its internal analytical capacity and responsiveness to risks are welcome.”
Комментарии