Georgia: Fiscal Resilience and Social Protection Support Program (Subprogram 1)

Sovereign Project | 54271-001

The proposed Program is part of a comprehensive and integrated package of support from the Asian Development Bank (ADB) to the Government of Georgia to help address adverse health, social and economic impacts of the coronavirus disease (COVID-19) pandemic. The Program supports Georgia's return to inclusive economic growth by addressing longstanding institutional fragilities that were further exposed as a result of the COVID-19 crisis. The Program is aligned with ADB's Strategy 2030, including operational priorities on addressing remaining poverty and reducing inequalities, accelerating progress in gender equality, strengthening governance and institutional capacity. The Program is also aligned with the ADB Country Partnership Strategy, 2018 2022 for Georgia.

Project Details

  • Project Officer
    de Almeida Vieira de Sa, Rogerio
    Central and West Asia Department
    Request for information
  • Country/Economy
    Georgia
  • Sector
    • Public sector management
Project Name Fiscal Resilience and Social Protection Support Program (Subprogram 1)
Project Number 54271-001
Country / Economy Georgia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3993-GEO: Fiscal Management and Social Protection Support Program (Subprogram 1)
Ordinary capital resources US$ 200.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Finance / Money and capital markets

Public sector management / Public expenditure and fiscal management - Reforms of state owned enterprises - Social protection initiatives

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed Program is part of a comprehensive and integrated package of support from the Asian Development Bank (ADB) to the Government of Georgia to help address adverse health, social and economic impacts of the coronavirus disease (COVID-19) pandemic. The Program supports Georgia's return to inclusive economic growth by addressing longstanding institutional fragilities that were further exposed as a result of the COVID-19 crisis. The Program is aligned with ADB's Strategy 2030, including operational priorities on addressing remaining poverty and reducing inequalities, accelerating progress in gender equality, strengthening governance and institutional capacity. The Program is also aligned with the ADB Country Partnership Strategy, 2018 2022 for Georgia.
Project Rationale and Linkage to Country/Regional Strategy Economic performance forecasts for FY2020 have been revised downwards. The COVID-19 pandemic had a significant negative impact on Georgian economy. While the drop in remittances and exports was less severe than initially envisioned, it did not offset the impact felt on the tourism sector and FDI, leading to an overall downward revision in forecasts for GDP frowth in 2020. As a result of COVID-19, Georgian economy is now expected to contract by 5% in 2020, down from the previous estimate of -4% estimate. These revised forecasts are based on recent available data which indicate a contraction of 12.6% in growth y-o-y for the second quarter of 2020 and an overall 5.8% contraction for the first half of 2020. In the second quarter of 2020, tourism revenues reduced by $ 849mn y-o-y which were partly, but not entirely, compensated by significantly reduced trade balance (-$ 497mn y-o-y) as imports fell sharper than exports (down 31.8% y-o-y and 24.7% y-o-y, respectively). There was a significant drop in remittances in April due to economic lockdown globally, however it quickly rebounded in June 2020 increasing by 17.8% y-o-y for that month. After the GEL hit a record low level in March 2020, it appreciated by 6.9% q-o-q against the USD, reflecting adequate monetary policy response by the NBG, as well as external funding support and remittances. Annual inflation in June 2020 was 6.1%, above the 3% target, due to disruption to supply chains and strengthened influence of FX pass-through.
Impact Inclusive economic recovery from the COVID-19 crisis
Project Outcome
Description of Outcome More effective management of risk exposure by the public sector and enhanced and fiscally responsible social protection of vulnerable people.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Management of public exposure to fiscal risks is strengthened.

Domestic debt market for government securities is deepened.

Adequacy and fiscal sustainability of social protection programs strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer de Almeida Vieira de Sa, Rogerio
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance
Nodar Khaduri
16 Gorgasali St., 0114
Tbilisi
Georgia
Timetable
Concept Clearance -
Fact Finding 07 Aug 2020 to 21 Aug 2020
MRM 18 Sep 2020
Approval 29 Oct 2020
Last Review Mission -
Last PDS Update 29 Oct 2020

Loan 3993-GEO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Oct 2020 29 Oct 2020 31 Dec 2020 31 May 2021 - 31 May 2021
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 200.00 Cumulative Contract Awards
ADB 200.00 17 Jun 2022 209.22 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 17 Jun 2022 209.22 0.00 100%

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