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Default is expected the year Saakashvili resigns2010-04-02 01:10
Georgia's aggregate foreign debt has exceeded 80 percent of the country's GDP. Besides, President Mikhail Saakashvili personally limited it to 60 percent last year. However, by 2013, the president who has already served two terms of office will have to resign, and his successor is going to face a default. However, some of the experts see no grounds to be worried, so long as the state share of debt is not that large.
National Bank of Georgia has revealed information on the country's aggregate foreign debt, which exceeded 80 percent of the gross domestic product.
Indeed, the state, the banks and the enterprises owe 8,6 bln dollars to the foreign creditors. In 2009, the country manufactured products to the amount of only 18 bln laris, which is a bit more than 10 bln dollars. Thus, the debt amounts to 85 percent of the GDP.
Georgia's largest creditor is World Bank which lent Tbilisi 1,2 bln dollars. Another 848 million dollars were provided by International Currency Foundation. Asian Development Bank accounts for 184 mln dollars. Besides, Georgia owes 196 mln dollars to Germany, 118 mln dollars to Russia, 55 mln dollars to Japan, 50 mln dollars to European Union and 36,7 mln dollars to the United States of America.
The fact that in February the state debt amount has reduced sounds quite optimistic. It was as much as 3,4 bln dollars at month's end, while on January 31 it was 33,5 mln dollars greater.
Of course, the situation is not that radiant when compared to the last year figures. At the beginning of March 2009 the Georgian treasury owed the foreigners approximately two and a half billion dollars.
Since then, Georgia has obtained a great number of new loans from the International Monetary Fund, World Bank and Asian Development Bank. Besides, the amount of debt grows because of the falling national currency exchange rate. Since the beginning of the year, the lari has lost 3,5 percent of value, as the Business Georgia portal informs.
This year, Tbilisi is going to lack the means needed to clear the current debts. The budget implies 152 and a half mln laris (or 87 mln dollars) for settling with the creditors, while, according to the calculations of the Economic Problems Research Center, it is necessary to pay 95 mln dollars. 121 mln plus 70 mln of interest will have to be paid in 2011, while in 2012, Georgia will have to pay 257 mln dollars plus 68 mln of interest.
However, 2013 is going to be the hardest year: some of the experts forecast Georgia's total default by that time.