Fitch reaffirms Georgia to 'BB’ with stable outlook

Fitch has reaffirmed Georgia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a stable outlook, Agenda.ge reports.

Fitch upgraded the country’s rating to 'BB' from 'BB-' earlier in February. 

"Georgia's ratings are supported by governance and business environment indicators that are above the current medians of 'BB' category peers, and a track record of macroeconomic resilience against regional shocks”, Fitch announced yesterday.

It also noted that Georgia's external finances “are significantly weaker than the majority of 'BB' category peers”. However, Fitch said that Georgia is facing “a new external shock after withstanding a testing external environment in 2018”. 

"Dynamic tourism exports and lower import growth following the completion of large energy projects led to a narrowing of the current account deficit to 7.7% of GDP in 2018, from 8.8% in 2017”, Fitch stated.

It also mentioned the recent ban on flights imposed by Russia, which is "the largest source of tourist arrivals in Georgia". Fitch said the Georgian authorities "are assessing the impact from the ban and their policy response".

Fitch forecasts the current account deficit will narrow further to an average of 5.3% over 2019-2021 versus 3% for the current 'BB' median.