President of National Bank Warns Against Default

(Tbilisi, August 21, 2003, Civil Georgia) – Georgia is not capable of paying its foreign debts, said the President of the National Bank of Georgia, Irakli Managadze, at a government meeting on August 20.

?Actually the country faces the risk of default if it fail to pay its foreign debts under the schedule fixed by the Paris Club,? Managadze told reporters.

?The failure to meet the IMF recommendations may complicate the discussions about restructuring the foreign debt at the Paris Club session in September. This will have a negative impact on the investment climate and will trigger macro-econom!
ic instability in the country,? said the President of the National Bank.

If Georgia fails to close its fiscal gap by amending the 2003 budget, the IMF will withdraw its support at the talks between Georgia and the Paris Club.

The total amount of Georgia?s foreign debt is USD 1.7 billion.

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