On 29 December, the National Bank of Georgia (NBG) published their information on Georgia’s public debt in the year 2020.
As of 30 September 2020, the gross external debt of Georgia amounted to $19.7 billion as of which constituted 120.4% of the last four quarters' gross domestic product. It was stressed that in the third quarter of 2020 the gross external debt of Georgia increased by $781.5 million. Out of that, an $83.3 million increase was caused by price changes, while $48.9 million increase was due to exchange rate changes. The public sector debt was divided into four categories, namely: 1) debt of the general government - $6.8 billion which is 41.4% of the country’s GDP; 2) external liabilities of the National Bank of Georgia - $457.8 million, 2.8% of GDP; 3) bonds of public enterprises - $794.9 million, 4.9% of GDP; and 4) loans of public enterprises - $904.4 million, 5.5% of GDP. The external debt of the banking sector amounted to $4.4 billion which was 27.2% of GDP, while intercompany lending amounted to $3.3 billion, which was 19.9% of the country’s GDP.
Speaking on the net international investment position (IIP) of Georgia, it amounted to negative $23.9 billion. The net IIP (the difference between the external financial assets and liabilities of a country) deteriorated by $209.7 million compared to the previous quarter. International assets had amounted to $11.0 billion, which was a $353.5 million increase compared to the previous quarter, while liabilities increased by $563.2 million and amounted to $34.9 billion.
While assessing the impact of the Covid-19 pandemic on tax revenues, Georgia’s Finance Minister Ivane Machavariani said that as a result of the pandemic, the budget would have a deficit of $1.2 billion in tax revenues this year compared to the initial plan. “It's worth noting that this is just a deficit from the economic downturn, and it does not include the more than $ 300.0 million in tax reliefs that we have enacted in the form of income and property taxes to support businesses and maintain jobs,” he added. It was also reported that the income tax exemption in the country would be extended for another 6 months starting from December 2020.
In regard to social issues, Georgia’s Prime Minister Giorgi Gakharia stated that state social assistance and social sustainability would be the main task of the Georgian government in 2021. He also said that the Georgian government should try to maintain existing work places and create new ones during the next year. While talking about the targeted social assistance programme, Gakharia said that currently 130,000 Georgian citizens have applied for one-time 300 lari assistance, of which 110,000 have already got it.
Georgia’s National Statistics Office (GeoStat) published the employment and unemployment rate. According to the GeoStat data, the unemployment rate has increased, and the employment rate has decreased in the country. The unemployment rate in Georgia rose by 0.2% and equalled 17.0 %, while the employment rate fell by 1.3% and equalled 41.8 %.
It was also reported that the tariff on electricity for the population and commercial sector in the country would be increased by 3.5 Tetri for the coming year. The General Director of Energo-Pro Georgia Mikheil Botsvadze stated that it was necessary to increase the tariff as the current price, which was set on 1 January 2018, has long been unable to reimburse the costs of electricity purchase or other dramatically increased charges. “We have been in a severe financial crisis, had to abandon all development plans, significantly reduce investment projects, and even faced problems in the financing of the salary fund. We are all aware of the sensitivity of the issue and the social factor. Moreover, the significantly increased tariff would lead to an increase in problematic debts or various risks. Now the Electricity Regulatory Commission has to make the decision,” he stated.
