International Monetary Fund names the reasons for fiscal risks in the country. Francois Painchaud, Resident Representative of IMF in Georgia, states that the so-called PPP projects (public-private partnership projects) might become the source of increasing fiscal risks. Partnership Fund is also named as the source of risks.
“Since 2014, the state debt has been increasing and in Georgia it has reached almost 45% GDP. We support fiscal consolidation and minimization of fiscal risks. This means stage-by-stage reduction of budget deficit, as well as minimization of other fiscal risks, among which are PPP projects – one of the source of the risks are PPP projects. Therefore, it is necessary to have certain guidance for such projects – the government should know when and why to share the risks of private sector and how to calculate these risks.
We also may see Partnership Fund as one of the sources for fiscal risks. That is why we would like to limit it. It can issue loans, but at the same time, it is a public company”, – states Francois Painchaud.
The government has already started working on legislation on public-private partnership projects. Such projects were named as one of the reasons for suspension of previous IMF program. The new IMF program limits new loans of Partnership Fund and sets the ceiling/threshold for its money squeeze.
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