March 29, 2019 / 10:15 AM / a month ago

Georgia sees growth of at least 5 pct, plans local and foreign bond issues in 2019

TBILISI, March 29 (Reuters) - Georgia expects 2019 economic growth of at least 5 percent, and is looking at issuing sovereign bonds in its national currency as well as in U.S. dollars and euros this year, economy and sustainable development minister Giorgi Kobulia said.

“We intend to do it potentially this year. The timing depends on the refinancing of existing obligations and many other things,” Kobulia said in an interview with Reuters late on Thursday.

On the size of the issues, he said each one would be in the order of “several hundred millions” of the currency in which the bond is being issued.

Kobulia added that issuing bonds in dollars and euro was necessary “not only because we need capital, but we also need to keep creating benchmarks for investors”.

Georgia issued $500 million worth of 10-year Eurobonds in 2011 and at the same time bought back $417 million of its five-year $500 million Eurobonds, which it had issued in 2008.

Georgia’s economic growth slightly slowed last year to an annual 4.7 percent from 5 percent in 2017. Kobulia said that the former Soviet republic can do more this year.

“On balance it is 5 percent, but it can be higher,” Kobulia said, adding that the indicator would depend on the external environment and the government’s efforts to develop the private sector.

Kobulia said the growth this year would be driven by tourism and infrastructure, the energy and financial sectors, as well as manufacturing. Georgia serves as a transit route for Caspian Sea oil and gas, and has a growing tourism sector.

He said he expected foreign direct investment to grow by 10-15 percent this year from $1.232 billion in 2018.

The 49-year-old minister, who has an MBA from Emory University in the United States and was a chief partner at McKinsey consultancy company, said the government saw big potential in supporting professional education programmes as well as improving logistics and transportation systems.

The government planned to launch a regular container vessel from the Georgian Black Sea port of Poti to the Romanian port of Constanta to expand Georgian exports to Europe, he said.

He also said the government had plans to prepare several state-owned assets, including its postal service, for sale. (Editing by Peter Graff)

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