IMF will provide Georgia with additional USD 420 million of financial support, increasing the total amount made available under the stand-by agreement (SBA) to USD 1.164 billion.

A staff-level agreement between IMF and the Georgian authorities, which is expected to be approved by the Fund’s executive board in August, also envisages extension of the SBA from its initial 18 months to 33 months, with expiration in June 2011.

SBA, agreed between Georgia and IMF last September, originally envisaged USD 750 million financial package to cover part of the external financing gap and to ensure macroeconomic stability.

“The increase in the financial package and extension of the SBA through mid-2011 would help support the economic policies put in place by the Georgian authorities to overcome the pressures created by the international financial and economic crisis, which came on top of the economic and financial disruption caused by the conflict with Russia,” said Edward Gardner, head of IMF mission, which visited Georgia on July 7-22.

“Georgia’s strong record of reform and good performance under the SBA give confidence about the authorities’ ability to steer the economy through a difficult adjustment period,” he said.