Georgia’s gross external debt amounted to USD 10.8 billion of which USD 3.6 billion was public sector debt and USD 866.6 million of the country’s central bank as of September 30, 2011, according to the National Bank of Georgia.
The banking sector accounted 18.1% share of the gross external debt, or USD 2 billion, according to the figures released by the central bank last week. It said that 95.3% of the gross external debt was denominated in foreign currency.
The credit rating agency Fitch, which has raised Georgia’s sovereign-credit rating one notch to BB-, three short of investment grade, said in December, that general government debt was set to decline in 2012-2013 from the peak of 37% of GDP reached in 2010.
It also said that while 79% of debt was in foreign currency, “Georgia can still borrow from multilateral and bilateral sources.”
“Concessional terms bring down debt servicing costs relative to peers. Georgia has smoothed its maturity profile following a successful Eurobond issue in April 2011, whose proceeds were used to buy back the majority of a Eurobond maturing in 2013,” the credit rating agency said.
Fitch also said that Georgia’s current account deficit, estimated at 11% of GDP in 2011, was a weakness, which was not expected to significantly narrow.
“Equity foreign direct investment will finance around half of the CAD [current account deficit] in 2012-2013. The rest is financed by a mixture of public and private sector borrowing. As a result, net external debt is amongst the highest among 'BB'-rated sovereigns at 47% of GDP,” the credit rating agency said.