On 28 August, the global credit rating agency Standard & Poor's (S&P) affirmed Georgia’s 'BB/B' long- and short-term foreign and local currency sovereign credit ratings with a stable outlook, reported agenda.ge. 

The S&P report outlined that ‘‘the coronavirus pandemic has pressured Georgia's economic, external, and fiscal metrics by hitting tourism, remittances and foreign direct investment (FDI) inflows. However, financing secured by the authorities from international financial institutions would mitigate lost foreign exchange revenues, while covering Georgia's larger twin fiscal and external deficits.

S&P further said that Georgia’s ratings are constrained by low income levels, as well as by balance-of-payments vulnerabilities, including its import dependence and sizable external liabilities. It noted however that ‘the ratings are supported by Georgia's relatively strong institutional arrangements when compared regionally; its floating exchange rate regime; and the availability of timely, concessional financing from international financial institutions under extenuating circumstances.’ It also said that ‘Georgia's economy will only recover to 2019 levels in 2022.’

The S&P report expects that the external environment for Georgia will remain challenging in the wake of the Covid-19 outbreak. Nevertheless, it concluded that Georgian policymakers’ efforts to widen the country’s economic base, diversify its export geography and foreign investment, and develop its infrastructure are likely to maintain strong economic growth while gradually reducing external imbalances in the medium term.

To note, on 14 August, the global credit rating agency Fitch also published their report on Georgia, affirming the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB’ with a negative outlook (Caucasus Watch reported).