By Margarita Antidze

Georgia is well positioned to weather the financial crisis thanks to billions of dollars in aid after last year's war with Russia and the economic policies pursued since then, the IMF said on Friday.

"Georgia is relatively well placed in comparison with other countries, because it has already put in place a series of measures to deal with the shock that happened last summer," Masood Ahmed, the IMF's Middle East and Central Asia Department head, told Reuters, referring to the August war.

"The impact on Georgia will be more moderate in comparison with other countries," he said in an interview in Tbilisi.

The Georgian economy grew more than 12 percent in 2007 on the back of foreign investment attracted by the pro-Western government of President Mikheil aakashvili.

But a five-day war in August, 2008 -- when Russia repelled Tbilisi's military assault on the breakaway region of South Ossetia -- scared off investors just as the financial crisis began to take hold, compounding the political pressure on Saakashvili.

Official figures for 2008 are not yet available, but the government expects GDP growth to have slowed to 1.5 percent last year, reaching a value of around $10 billion.

After the war, Georgia was offered $4.5 billion in conditional aid. The International Monetary Fund also approved a $750 million standby loan in September, of which Tbilisi has so far received $250 million. Another $350 million of the loan is expected to be allocated in 2009.

Much of the aid was conditional on economic measures the government pursued in the months following the war.

Ahmed commended the government's economic strategy, which he said was based on a flexible foreign exchange regime, tackling unemployment, using foreign aid to stimulate infrastructure projects and solve social problems, as well as measures to protect the poor.

"It's a very sensible strategy. It underpins the programme of assistance that the IMF is financing in Georgia," Ahmed said.

He avoided making forecasts about Georgia's economic growth in 2009, but said it would probably be more conservative than the two percent forecast by the Georgian government, slightly up on 2008.

Georgia says inflation is likely to drop to 3-4 percent.

The Georgian parliament on Friday endorsed former finance minister Nika Gilauri as the country's fifth prime minister in five years. He promised further tax cuts, measures to support business and to create jobs.

The government, Gilauri said, would focus on attracting investment from donors and international financial institutions rather than private investors.

Ahmed agreed that this strategy would be more productive. "During the course of 2009 the continuation of that approach will be more fruitful, given the fact that it will take a bit longer for the private sector to come back to emerging markets with substantial inflow," he said.

Georgia expects to secure more than $2 billion in foreign capital inflows in 2009.

"Our general advice this year is to be conservative in your assumptions, be proactive in your policies, be prepared to change course, if the situation gets worse," Ahmed said.