The Asian Development Bank (ADB) today approved a $200 million policy-based loan to support Georgia’s recovery from the coronavirus disease (COVID-19) pandemic by addressing key fragilities in the country’s public financial management and social protection systems.
The Fiscal Resilience and Social Protection Support Program is part of ADB’s comprehensive and integrated package of support to help Georgia mitigate the pandemic’s adverse health, social, and economic impact.
“This program’s policy actions are critical in dealing with the economic impact of COVID-19 and ensuring macroeconomic stability in the medium to long term while continuing to protect the livelihoods of those most affected by the crisis,” said ADB Young Professional Rogerio de Almeida Vieira de Sa. “The program will benefit senior citizens in particular who are disproportionately exposed to the impacts of COVID-19.”
While Georgia’s public health response has been generally effective in containing the spread of COVID-19, the pandemic is having a significant impact on the economy through a marked slowdown in tourism and foreign direct investments. The pandemic also created a large financing gap as public expenditure to fund the government’s anti-crisis measures increased while tax revenues declined.
The ADB program aims to strengthen the management of public exposure to fiscal risks and deepen domestic markets for government securities. These measures seek to reduce the share of general government debt denominated in foreign currency and minimize public exposure to refinancing and currency risks that threaten macroeconomic stability, which is a prerequisite for economic recovery.
The program will also help ensure the fiscal sustainability of social protection programs that were expanded during the crisis. It will support government reforms to the national pension scheme, benefitting senior citizens and other social protection systems to promote an inclusive return to economic growth.
The program complements ADB’s $100 million loan approved in May to support the government’s anti-crisis measures, including tax deferments for small and medium-sized businesses, temporary payments for pandemic-affected workers, and free access to COVID-19 diagnostic and treatment services.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.