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Friday, March 19, 2010

IMF Board Gives Georgia Access To $148.7 Million Of Loan

By Tom Barkley

Dow Jones Newswires

WASHINGTON -(Dow Jones)- The International Monetary Fund's executive board Friday approved giving Georgia access to $148.7 million of its loan.

Naoyuki Shinohara, deputy managing director of the IMF and acting board chair, said Georgia's economy is showing increasing signs of recovery. However, improvement is still needed in credit growth and foreign direct investment.

"With the economy now recovering, the 2010 economic program focuses on fiscal retrenchment, which is aimed at preserving debt sustainability and macroeconomic stability and facilitating the exit from IMF balance of payments support," he said in a statement.

The IMF-sponsored program envisions a reduction in the budget deficit to 7.4% of gross domestic product this year from 9.2% in 2009, while protecting social spending.

Once economic activity and lending picks up, some monetary tightening will become necessary "to promote dedollarization and preserve disinflation gains," he said.

The loan, which Georgia initially received in September 2008, was increased to $1.14 billion last August and extended until June 2011.