The government of Georgia should continue fiscal adjustment to build buffers and support priority spending, International Monetary (IMF) delegation head James John said on Friday
WASHINGTON (Pakistan Point News / Sputnik - 21st July, 2023) The government of Georgia should continue fiscal adjustment to build buffers and support priority spending, International Monetary (IMF) delegation head James John said on Friday.
"Continued modest fiscal adjustment remains appropriate for 2024 and the medium term to build buffers under the fiscal rule deficit ceiling and create room for priority spending," John said in a statement upon completing discussions with the Georgian authorities.
John pointed out that state-owned enterprises and renewable energy development reforms should seek to limit fiscal risks while advancing efficiency and competition.
The Georgian government should keep the existing restrictive monetary policy and make gradual albeit cautious adjustments to the policy rate until core inflation "durably falls," he said.
John also urged the Georgian government to maintain a proactive approach to financial regulation and supervision as they would further enhance resilience and guard against risks.
The Georgian economy has shown a strong performance in that the headline inflation fell to 0.6% in June and the average growth in 2023 was expected at 6%, he said.
However, John warned about the high risk of uncertainty and called for continued prudent fiscal and foreign exchange reserve management.
The Georgian authorities also have to be vigilant against domestic inflation and financial sector risks, he added.
