The Investor’s Service of the international rating corporation Moody’s has upgraded the Government of Georgia's local and foreign currency issuer ratings to Ba2 from Ba3. The outlook remains stable.
Int’l rating company Moody's upgrades Georgia's ratings
By Tea Mariamidze
Wednesday, September 13
Georgia's foreign currency senior unsecured ratings have also been upgraded to Ba2 from Ba3.
The local currency bond and deposit ceilings were raised to Baa1 from Baa3.
The foreign currency bond ceiling was raised to Baa3 from Ba1 and the foreign currency bank deposit ceiling was raised to Ba3 from B1. In addition, the short-term foreign-currency bond ceiling was raised to P-3 from Not Prime and the short-term foreign currency deposit ceiling was maintained at Not Prime.
The company reports that Georgia's economy has proved resilient to a significant economic, financial and exchange rate shock in the region in 2014-16.
“Georgia's GDP growth averaged 3.4% during this period, when many of its neighbors were in or close to recession. We attribute this resilience to effective macroeconomic policy management and strong banking supervision that allowed banks to continue to finance the economy,” the official webpage of the corporation reads.
“Looking ahead we expect Georgia's economy to strengthen, and its resilience to shocks to continue to be enhanced as ongoing measures to diversify and reform the economy bear fruit,” Moody’s added.
It also says that the reforms in Georgia include success in reducing corruption to low levels compared with most other sovereign states and significant reductions in the number of taxes along with simplified tax administration, as well as broadening the availability of online tax payments.
“Labor market reforms started in the last few years which ease restriction on hiring, work hours and redundancy will also boost the potential for enhanced productivity in the economy,” the corporation said.
The organization underlines that the business environment has also improved in Georgia through reform of the system of licenses and permits which, for example, reduce the time to register businesses and receive permits for construction projects.
Georgia’s Deputy Minister of Economy, Nino Javakhadze, says that the increase of Georgia’s currency issuer ratings is a clear signal for investors that the situation in Georgia is improving.
“This should be logically followed by an inflow of investments and international capital,” the Deputy Minister stated.
She also believes that the improvement of the rating will simplify local financial institutions’ access to the international financial resources.
This is the first case of improvement of Georgia’s rating by Moody’s since October 2010.