ECONOMICS OF GEORGIA AND STATE DEPT

Abstract

      Production of goods and services determine an Economic situation in the country and the growth of income of the population. The stability of the economic situation is an indicator of the debt amount in a country. However, solvency is not less important. Developed countries are less likely to default, but a developing country such as Georgia, characterized by unstable economic growth and persistent fiscal deficits, has debt that hinders the country's socio-economic objectives and increases the risk of repayments. Regarding Georgia’s external debt, it is worth noting the devaluation of the lari and its ratio to gross domestic product, since the state external debt will reach thirty-three billion in 2022, and the upper limit of the debt is close to -56.5%. Paying off the debt would not be a problem if the country's population were employed, but it is a problem in this regard too. In particular, according to the unified database of socially vulnerable families for 2022, their number reaches 643,167 people, and 22.1% of the unemployed population is added to this. Judging by the analysis of the data provided, the correlation between GDP and public debt is high. The mentioned situation means that the government cannot regulate the current economic growth and development situation, because the risk is high.

       Based on the above problems, it is recommended that the internal and external debt taken by the government be aimed at effective reforms. The increase in prices for goods and services significantly reduces the well-being of the population in the country.