The National Bank of Georgia Publishes Macroeconomic Forecast Scenarios for Promoting Efficient Financial Reporting in Financial Institutions
The National bank of Georgia publishes the new issue of macroeconomic forecast scenarios for the purpose of an International Financial Reporting Standard IFRS 9.
The scenarios are intended for promoting transparent, consistent, and efficient financial reporting in financial institutions. The current update of the scenarios is published several months earlier than usual in order to provide the financial institutions in a timely manner with forward-looking macroeconomic information in the face of deteriorated economic conditions and increased uncertainty caused by COVID 19.
According to IFRS 9, forward-looking information is essential for credit risk assessment. In particular, expected developments in macroeconomic and financial environment as well as domestic and external risks should be accounted for when assessing expected credit losses. This will facilitate timely recognition of credit risk, and therefore contribute positively to financial stability.
In addition, it is important that the macroeconomic assumptions used by different financial institutions are comparable. This can be accomplished by utilizing the published macroeconomic scenarios.