Economy

Georgia Plans to Reduce Currency Risks and Boost Local Bond Market

Georgia: The Finance Minister of Georgia, Lasha Khutsishvili, announced the Debt Management Strategy for 2024-2027, which will be presented to the Government of Georgia soon.

The strategy aims to reduce the currency risks of the public debt portfolio, which is currently at a safe level of 39.3% of GDP, by increasing the share of internal debt and diversifying the sources of financing.

Khutsishvili said that the debt level had decreased by about 20 percentage points in a record-low two-year period since 2020, thanks to the prudent fiscal policy and the economic recovery from the pandemic.

However, he noted that the currency composition of the debt was still a significant challenge, as the dollarization rate was 72.7%, down from historically above 80%.

“Reducing dollarization is a long process, but we are consistent in this policy and in the medium term we will significantly reduce the bond portfolio linkage to external shocks,” he said.

He added that the medium-term goal was to get local bonds to international indices, which, together with investment ratings, would increase the attractiveness of local bonds for non-resident investors.

He also said that state-owned enterprises could play a vital role in the development of the local stock market, and that he expected positive developments in this direction.

The Debt Management Strategy for 2024-2027 is a document that outlines the objectives, principles, and instruments of the public debt management in Georgia, and is updated every four years.

 

Lasha Khutsishvili

Lasha Khutsishvili is a Georgian politician who has been Minister of Finance of Georgia since 1 April 2021.

The Ministry of Finance of Georgia updated the General Government Debt Management Strategy for 2024-2027. The strategy ensures the transparency of the General Government Debt Management policy and increases the awareness of investors, creditors, rating agencies and the public in this direction.

Zurab Kvaratskhelia

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