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Georgia’s foreign debt increases

By Messenger Staff
Monday, May 16
Since 2008 Georgia's foreign debt has increased dramatically. In the last year alone it has risen by 20%. In April 2010 foreign debt was at GEL 6.2 bln but by this month it had reached GEL 7 bln. Since 2003 when the so called rose administration came to power for the first 3-4 years the level of foreign debt was stable and there was even a slight decrease. However since 2007 it has started to increase rapidly, particularly in 2008-09 due to Russian aggression and the general economic crisis resulting in a great need for financial assistance from abroad.

Independent economic analysts think that unfortunately these foreign loans are not being spent efficiently and that the economy is not benefiting from foreign money. To service the foreign loans is a heavy burden for Georgia's economy and the country has recently taken the risky step of issuing euro bonds to cover its previous loans.