IMF to offer $750 mil. loan to Georgia to help economic recovery
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The International Monetary Fund said Wednesday it has reached an agreement in principle with Georgia to provide a $750 million loan package to the country to help it rebuild its economy hurt by recent clashes with Russia.
The IMF Executive Board is expected to approve the loan package, which will be provided in the form of an 18-month stand-by arrangement, at its meeting in mid-September.
‘’The main objectives of the stand-by arrangement are to cover part of the expected temporary external financing gap, and to help sustain the confidence of markets and investors by supporting policies that will ensure continued macroeconomic stability and promote the recovery of private sector investment and economic growth,'’ the IMF said in a statement released in Tbilisi.
In response to a request from Georgia, an IMF team has been visiting the country since Aug. 23 to discuss the financing.
David Owen, head of the IMF mission, was quoted as saying that the loan package is to ‘’help mitigate the adverse economic and financial consequences of the recent conflict.'’
In late August, finance ministers from the Group of Seven major economic powers gathered in Tokyo and agreed they will support the economic reconstruction of conflict-hit Georgia through international financial institutions, including the IMF. The G-7 groups Britain, Canada, France, Germany, Italy, Japan and the United States.
Russia and Georgia, a former Soviet republic, recently signed a French-brokered cease-fire accord after their troops clashed in August over the issue of South Ossetia, a pro-Russian province seeking independence from Georgia.
Filed by Ozlem Yucel under Development, East-West Relations: Central and Eastern Europe