International Monetary Fund (IMF) names fiscal risks reasons. Francois Painchaud, resident representative of IMF in Georgia, noted that the so-called PPP projects may inspire a growth in fiscal risks.
IMF also considers Partnership Fund of Georgia to be one of the inspiration factors for fiscal risks.
“State debts started growing since 2014 and today state debts constitute about 45% of GDP. We care for fiscal consolidation and reduction of fiscal risks. This implies gradual reduction of budget deficit and narrowing other fiscal risks, including PPP projects is one of these directions. PPP projects represent one of the key sources of fiscal risks. Therefore, you should have certain guidebook for similar projects. Government should know why and when to share private sector’s risks and how to calculate this risk. Partnership Fund should be also considered as one of the sources of fiscal risks. Therefore, we want to limit it. It is entitled to issue loans, while it is a state company”, Francois Painchaud said.
We remind you that Government is working on legislation about projects created by partnership of public and private sectors. Similar projects were named as one of the key reasons for suspension of IMF’s previous program in Georgia. However, the new program of IMF limits new loans of Partnership Fund and sets certain margins to its money deficit.