TBILISI Feb 15 The International Monetary Fund
starts a two-week mission to Georgia on Wednesday to discuss the
possibility of a new IMF-backed programme that could underpin
economic reform and encourage investors.
The former Soviet republic, through which pipelines carry
oil and gas from the Caspian Sea to Europe, has been hit by a
decline in exports, a plunge in the currencies of its main trade
partners and a strengthening of the U.S. dollar. Growth slowed
to 2.2 percent last year from 2.8 percent in 2015.
"The IMF mission will discuss the government's reform agenda
and Georgia's macroeconomic prospects and challenges," Francois
Painchaud, the IMF representative in Georgia, told Reuters.
"In this context, the authorities and the mission will
assess prospects for an IMF-supported programme."
Georgian authorities requested the mission, central bank
governor Koba Gvenetadze told Reuters.
"Discussions will be about initiation of a new programme,
which the fund may support in Georgia," he said, declining to
elaborate on whether Tbilisi was in urgent need of funding.
"It might be a programme under which the country can borrow
or a precautionary programme under which the country may not
borrow at all," Gvenetadze said. "But once you are in the
programme, reviews are going on and if there is a need for
money, it can be withdrawn."
An IMF programme was "usually a very good signal for foreign
and domestic investors that the country's macroeconomic policies
are sound," he added.
The IMF approved a previous three-year stand-by arrangement
worth about $136 million in 2014 but only 80 percent was
disbursed, and the last two reviews were not completed.
Gvenetadze said this was due to some disagreements over
fiscal sustainability issues and banking supervision.
"If we are able to start a new programme, it will be a very
good sign from our side that we want to keep macroeconomic
stability in the country," he said.
(Editing by Mark Trevelyan)