Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereign, sub-sovereign and supranational issuers. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for Georgia (BB/Negative; S-3/Stable) on 30 September 2020. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Georgia’s BB rating is underpinned by i) the authorities’ commitment to fiscal discipline and credible reform agenda supported by the EU-Georgia Association Agreement, alongside oversight from the EFF arrangement with the IMF; and ii) Georgia’s stronger performance on governance and business environment compared to its sovereign peers underpinning investments and FDI inflows into the economy. The Negative Outlook reflects the substantial impact of the coronavirus outbreak on Georgia’s economy and public finances, owing to high economic dependence on tourism, the economy’s small and open structure amid a high net external debtor position and structural current account deficits, resulting in markedly higher public debt and deficit levels. In addition, high shares of public and private sector borrowing denominated in foreign currency remains a challenge amid elevated exchange rate volatility. Scope expects Georgia’s next government to remain committed to structural reforms as well as to political association and economic integration with the EU.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Public Finance and Sovereign Ratings, 21 April 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Levon Kameryan, Analyst

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