Moody's affirms Georgia's ratings at Ba2 - maintains stable outlook. The published press release states: 

 

• The rating affirmation and stable outlook are underpinned by ongoing development of the fiscal and monetary institutions which has enabled an effective macroeconomic policy response to the pandemic-related downturn. Structural reforms carried out during the four-year Extended Fund Facility with the International Monetary Fund have also helped to buttress the economy's flexibility in response to shocks. 

 

• Moody’s expects inflation to fall towards the National Bank of Georgia’s (NBG) inflation target of 3% from 12.8% currently after temporary factors fade and tight monetary policy offsets commodity price and international supply constraint pressures. The current account deficit will also begin to narrow from a peak of 12.5% of GDP in 2020 towards pre-pandemic levels of around 5%, as remittances and non-tourism exports grow solidly and the longer-term benefits of reforms are realized, including reform of the pension system to build domestic savings.

 

• Still significant banking sector risk - related to still high, albeit declining, levels of dollarization