April 15, 2020 / 5:56 PM / 4 months ago

IMF to raise funding to Georgia to $450 million to fight coronavirus

FILE PHOTO: The logo of the International Monetary Fund (IMF) is seen during a news conference in Santiago, Chile, July 23, 2019. REUTERS/Rodrigo Garrido/

TBILISI (Reuters) - The International Monetary Fund (IMF) said on Wednesday it was ready to provide Georgia with increased funding of $450 million this year to help the ex-Soviet country in its fight against the coronavirus and support the economy.

The IMF said its mission would recommend its executive board allocate the first tranche of $200 million in May and to increase the fund’s support to Georgia this year by about $375 million in total, having originally planned to loan $75 million.

The Fund said the funding was set “to help finance health and macroeconomic stabilisation measures, meet urgent balance of payments needs arising from the COVID-19 pandemic, and catalyze support from the international community.

“Urgent balance-of-payments needs raising from the COVID-19 shock are estimated at about $1.6 billion in 2020-21, to be financed by IMF financing and other donor assistance,” the Fund said in a statement.

The country of 3.7 million had reported 306 coronavirus cases as of Wednesday, with three deaths.

The IMF also said it expected Georgia’s gross domestic product to decline by 4% in 2020, revising down its previous forecast for growth of 4.3%.

Separately, Georgia’s Prime Minister Giorgi Gakharia said the European Investment Bank (EIB) intended to allocate 200 million euros ($218 million) for the development of healthcare infrastructure in Georgia, along with fiscal and other needs.

Gakharia had said on Tuesday that international financial institutions and donors had agreed to provide $1.5 billion of support for Georgia, with an additional $1.5 billion for the private sector.

The Georgian government has taken measures to soften the economic shock of the virus, including imposing a moratorium on collecting property and income taxes in the hospitality sector, easing bank lending regulations, and increasing spending on infrastructure.

Reporting by Margarita Antidze; Editing by David Holmes

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