The FINANCIAL -- First Vice Prime Minister of Georgia, Minister of Economy and Sustainable Development, Dimitry Kumsishvili met with the Head of International Monetary Fund (IMF) Mission, Mercedes Vera-Martin and other members of the mission. The mission is currently carrying out the second review of the Advanced Financing Mechanism program in Georgia.
At the meeting, the parties discussed the progress of the program, which has been jointly implemented between Georgia and the IMF since 2017. In addition, the macroeconomic indicators of the country and current structural and economic reforms in Georgia were largely stressed at the meeting, according to Ministry of Economy and Sustainable Development of Georgia.
First Vice Prime Minister of Georgia, Dimitry Kumsishvili introduced the IMF mission with positive dynamics in the direction of Georgia's economic growth. According to the Minister, Georgia has completed 5% of real economic growth by 2017 and carried on with 5.5% growth in February 2018 which, as of the first two months of 2018, constituted to as high as 4.9% growth on the whole. According to Dimitry Kumsishvili, positive indicators are posed by positive dynamics in a number of directions, including turnover of enterprises, increased exports, number of tourists and money transfers.
The IMF members positively evaluated the economic growth rate of Georgia and noted that reforms implemented in the country positively affect the country’s economic activity.
The First Vice Prime of Georgia, Dimitry Kumsishvili also introduced the members of the Mission to the latest assessment of the international rating company FITCH. In particular, the rating of Georgia has changed from Stabile to Positive, which is extremely important for investors.
Speaking on ongoing reforms, the first Vice Prime Minister emphasized the profit tax reform that helped to increase the volume of direct foreign investments in Georgia. In particular, the growth of reinvestment in 2017 amounted to 129.6% (401.9 million US dollars) as a result of which the total reinvestment volume totaled 712.1 million USD.
The share of reinvestment equaled to 38.2% of total foreign direct investment and increased by 18.8% compared with the previous year. According to the First Vice Prime Minister, the increase in reinvestment indicates clearly indicates to the growth of investor confidence and positive expectations towards the country's business environment.
As inferred by Dimitry Kumsishvili, the increase in reinvestments has contributed to the profit tax reform that allows the private sector to direct their earnings towards making new investments and enhance business activity instead of taxes, which further increases the attractiveness of the country's investment.
The meeting also focused on reforms, including the pension reform, capital market development, public-private partnership draft law, energy and other important reforms. The ongoing trends and activities in the Georgian economy sectors were also discussed at the meeting.