Experts of Standard & Poor's raised the rating of Sakartvelo
Today it became known that the credit ratings service of Standard & Poor's raised long-term sovereign credit ratings of the Government of Georgia on the term foreign and local currency ratings from "B +" to "BB-". This was reported by Trend, citing the agency.
"At the same time, we reaffirm the short-term sovereign credit ratings of the Government of Georgia on the term foreign and local currency ratings at 'B'. The forecast of rating changes is "stable". Sovereign rating of the expected level of recovery of debt after the default - "4". Risk assessment of translation and currency conversion for non-sovereign borrowers Georgia - "BB", noted experts in their document.
The raising of ratings reflects good growth prospects in the country and improvement in public finances. Analysts believe that this is due to the commitment of governments to conduct a market-oriented policies.
"The The raising of ratings also reflects our view on the importance of having a stabilization of the geopolitical and domestic political environment", the experts of Standard & Poor's stated.
"According to our estimates, the GDP growth per capita will be averagely just over 6 percent in 2005-2014, what is higher than in countries with comparable ratings. In our view, the economic growth will be supported by increasing construction sector, tourism and export industries, which will be financed through increasing lending to the private sector and the further development of agriculture, which employs about 50 percent of all able-bodied citizens", said further in a report of the analysts.
The Agency expects that the inflow of foreign direct investment (FDI), on average, will be 6 percent of GDP annually. According to the Agency's forecast, the GDP per capita reached 3300 USD in 2011.
"We expect that the government will follow the new fiscal rules approved by the law, which oblige it to reduce its budget deficit to 3 percent of GDP by 2013. In our view, the government still maintains financial flexibility with respect to capital spending, which accounts 23 percent of all expenditures", said the experts of the rating agency.