Georgia’s Foreign Debt Accounts for 8.7 billion USD as of July 1

Gross External Debt of Georgia by June 30 of 2010 amounted to 8720.0 millions of USD, of which 2862.5 millions of USD (32.8%) is public sector debt, 852.6 millions of USD (9.8%) - National Bank’s debt, 1456.0 million of USD (16.7%) - Banking sector’s debt, 1336.0 millions of USD (15.3%) - other sector’s debt and 2212.8 million of USD (25.4%) is intercompany lending. A 95.1 percent of the Gross External Debt of Georgia is denominated in foreign currency.

In General, during the second quarter of 2010, Gross External Debt of Georgia decreased by 53.4 million of USD, of which 50.7 million of USD comes from the public sector. The National Bank’s foreign liabilities have decreased by 26.2 million of USD. Like preceding quarters, external liabilities of banking sector continued to decline. During the reporting quarter, decrease in foreign debt of the banking sector, amounted to 1.0 million of USD. At the same time, other sectors’ external liabilities shrunk by 12.2 million of USD. To the contrary, intercompany lending increased by 36.7 million of USD.

Increase in foreign liabilities mainly was observed in loans denominated in national currency. During the reporting period gross external debt in foreign currency declined by 93.7 million of USD and for the end of the quarter amounted to 8293.0 million of USD. Quite the contrary, the external debt denominated in national currency increased by 40.3 million of USD and by the end of reporting period stood at 427.0 million of USD.

The public sector’s external debt increase, caused by operational changes, amounted to 14.9 million of USD. While due to the exchange rates changes, gross external liabilities of public sector declined by 65.7 million of USD.

As mentioned above, within the second quarter, external liabilities of the National Bank decreased by 26.2 million of USD. From which, 3.4 million of USD decline in indebtedness was due to the operational changes (13.0 percent of the NBG’s total external debt decrease). Exchange rate changes led to decline NBG’s debt by 22.7 million of USD (or 87.0 percent of an overall decline).

During the corresponding period, long-term loans of the banking sector declined by 28.4 million of USD. To the contrary, short-term external liabilities of the banking sector increased totaling 27.3 million of USD. Due to exchange rate changes banking sector’s external debt decreased by 7.0 million of USD.

Within the reporting quarter, other sector’s external debt decrease, caused by operational and other changes, amounted to 4.4 million of USD and 20.9 million of USD respectively. Due to the exchange rates changes, gross external liabilities of other sector declined by 37.4 million of USD. As a result of operational changes, intercompany lending increased by 58.3 million of USD, whiles 20.0 million of USD decrease was caused by exchange rate changes. Within the second quarter of 2010, intercompany lending decrease due to other changes amounted to 1.6 million of USD. That mainly was caused by reclassification of other sectors’ external liabilities into the category under consideration.

In general, during the reporting period, operational and other changes led to increase the gross external debt of Georgia by 80.1 million of USD and 19.3 million of USD correspondingly. Although, due to exchange rate changes it has declined by 152.9 million of USD.