## 1. The Optimal Level of Gross International Reserves for Georgia ## Source details **Canonical URL:** [1. The Optimal Level of Gross International Reserves for Georgia](https://www.imf.org/-/media/files/publications/cr/2026/english/1geoea2026001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2026/english/1geoea2026001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2026/english/1geoea2026001.pdf.json) --- ### Context and recent developments - Real GDP grew by 7.5 percent in 2025; rapid estimates indicate real GDP growth accelerated to 9.1 percent y/y in Q1 2026. - Headline inflation: 4 percent at end‑2025; 5.9 percent in April 2026. Core inflation: 3.5 percent. - Policy rate raised by 25 basis points to 8.25 percent in May 2026. - Gross international reserves: USD 6.4 billion—102 percent of the IMF’s Assessing Reserve Adequacy (ARA) metric—at end‑April 2026. - Current account deficit: 2.6 percent of GDP in 2025. - Overall fiscal deficit: 1.5 percent of GDP in 2025; public debt fell below 35 percent of GDP. - Private sector credit growth: 14.9 percent in March 2026 (from 14 percent in 2025). - Deposit dollarization: declined. ### Reserve adequacy assessment — key findings (Box 1) - Baseline model (10 percent crisis probability) yields an optimal reserve level of about 130 percent of ARA. - Risk‑premia channel: - A 10‑percentage point increase in reserves‑to‑GDP can lower emerging market borrowing costs by 30–70 basis points. - For Georgia this raises optimal reserves by about 5 percent of ARA at lower crisis probabilities. - Dollarization/substitution channel: adds about 18 percent of ARA at a 10 percent crisis probability for Georgia. - FX intervention (FXI) channel: observed FXI patterns add about 10 percent of ARA to optimal reserves due to a shallow FX market and sensitivity to sentiment. - Combined implication: an optimal reserve range of about 145–150 percent of ARA at a 10 percent crisis probability. - Current coverage (~102 percent of ARA) is adequate under moderate risk scenarios but below levels suggested in high‑risk scenarios. ### Outlook and sensitivities (selected projections) - Growth: 6.5 percent in 2026, converging to 5 percent by 2028. - Current account: projected to widen to 5 percent of GDP in 2026 and remain around this level over the medium term. - Reserve coverage: expected to remain broadly stable near term and strengthen to nearly 120 percent of ARA over the medium term. - Inflation: expected to peak by mid‑2026, converging to the 3 percent target by mid‑2027. - Shock sensitivity: a 10 percent increase in oil prices, all else equal, raises - inflation by 0.4 percentage point, - the current account deficit by 0.4 percentage point of GDP, - the fiscal deficit by 0.1 percentage point of GDP. - Key risks: escalation/prolongation of the Middle East war; resolution of the Ukraine war reversing gains; Armenia‑Azerbaijan peace creating competing trade routes; strained EU relations affecting investor sentiment and FDI; a large USD 6.5 billion real estate project by a UAE investor as a potential upside. ### Reserve strategy recommendations - Scope to build further reserve buffers; staff analysis suggests a target range of 145–150 percent of the ARA metric for further accumulation as market conditions allow. - Preserve exchange rate flexibility; use FX interventions to smooth excessive volatility driven by sentiment shocks. - Continue opportunistic FX purchases; limit FX sales to addressing disorderly market conditions. ### Institutional governance recommendations (NBG) - Advance NBG governance reform to reinforce institutional credibility: - adopt a collegial decision‑making model; - strengthen independent oversight of the board by ensuring a non‑executive majority, raising quorum requirements, assigning the tie‑breaking vote to a non‑executive, enhancing board member qualification criteria, and prohibiting movements between executive and non‑executive roles during a member’s tenure. - Align macroprudential policy with disinflation objectives. *Source: Content unit 1geoea2026001 — 1. The Optimal Level of Gross International Reserves for Georgia (IMF).* --- ### Authorities’ response and governance stance ### Authorities’ concurrence and planned actions - Authorities broadly concurred with staff recommendations; some governance reforms to be implemented gradually. - NBG emphasized readiness to further tighten policy if warranted and reaffirmed commitment to exchange rate flexibility. - Authorities maintain that higher and more diversified reserves are appropriate for strengthening resilience to external shocks. ### NBG governance intentions - Advance reforms related to collegial decision‑making and board member qualification requirements in the near term. - Consider additional measures to strengthen board oversight at a later stage. - Noted the board has a non‑executive majority when fully staffed and that flexibility in moving between executive and non‑executive roles has functioned effectively in Georgia’s context. *Source: Content unit 1geoea2026001 — Authorities’ views (excerpt).* --- ### B. Building Fiscal Space for Priorities and Managing Risks ### 2026 fiscal target and near‑term outlook - 2026 budget deficit target: 2.5 percent of GDP (deemed appropriate and achievable). - Staff project modest overperformance due to conservative growth and tax revenue assumptions and larger‑than‑expected dividends from the NBG. - Capital spending expected to rebound as procurement backlogs clear; execution risks remain. - Fiscal stance expected to loosen modestly, with the cyclically adjusted primary balance weakening by 0.8 percent of GDP. - Temporary, well‑targeted support could be provided within the budget envelope if the Middle East conflict significantly affects activity and purchasing power, while avoiding broad‑based subsidies or tax cuts. ### Medium‑term fiscal framework and risks - Planned deficits: 2.3–2.5 percent of GDP in coming years would keep debt stable and below the fiscal rule ceiling. - Namakhvani arbitration expected fiscal costs: up to 1 percent of GDP once legal proceedings finalized, with payout spread over time. - Authorities considering increasing local currency issuance and attracting non‑resident investors to reduce FX share of debt below the current target of 65 percent; transition should be managed to avoid crowding out private credit and limit risks from higher borrowing costs and sovereign‑bank exposures. ### Revenue and spending reform priorities - Streamline tax expenditures; improve mining taxation; strengthen tax administration and medium‑term revenue strategy; enhance spending efficiency. - Tax policy specifics: - Increases in tobacco excises appropriate. - Differentiated excise rates introduced in 2026 to support domestic producers and curb smuggling risk; assess consistency with WTO rules. - Excises on cars older than six years raised and expected to be revenue neutral; broader review of vehicle taxation, including feebate schemes, could be warranted. - Tax administration: - Plans for a repeat TADAT assessment welcomed. - Georgia Revenue Service reorganization and digitalization, including pre‑filled tax returns, expected to improve efficiency. - Expenditure policy: - Advocate education and health spending reviews and stronger active labor market policies. - New methodology to improve targeting of social assistance, developed with World Bank support, expected to be launched in the last quarter of 2026. ### SOE governance priorities - Develop clear SOE reform strategy and supportive legislative changes to expand MOF financial oversight and reinforce risk‑based monitoring. - Identify, manage, and report quasi‑fiscal activities. - Strengthen ownership and governance arrangements: clearer separation of state ownership/policy/regulatory roles; more independent and merit‑based board appointments; stronger performance management via Statements of Corporate Intent; more transparent remuneration and accountability frameworks. - Economic Development Corporation of Georgia should focus on addressing market failures in business access to finance while avoiding crowding out commercial banks and creating fiscal risks. ### Authorities’ views on fiscal/SOE matters - Reaffirmed commitment to prudent fiscal policy and conservative budgeting as a buffer against downside risks. - Confident procurement reforms will strengthen capital spending execution. - Agreed with TA recommendations on SOEs and updating 2026–27 action plan, including expanding MOF oversight to all corporations with annual turnover exceeding GEL 10 million and major general government SOEs. - SOE law reform to follow later; action plans updated annually and fully implemented over the medium term. - Potential risks from the new development corporation are contained by MOF oversight, including veto powers over key decisions. *Source: Content unit 1geoea2026001 — Fiscal and SOE sections (excerpt).* --- ### C. Keeping the Financial Sector Resilient ### Overall assessment - Financial sector remains healthy but vigilance is essential as risks evolve. ### Dollarization, FX lending, and macroprudential stance - About 80 percent of FX bank loans remain unhedged. - In May, the NBG raised FX lending eligibility threshold for unhedged borrowers from GEL 750,000 to GEL 1 million and eased reserve requirements on FX liabilities. - Staff assessment: explicit ceilings on FX lending to unhedged borrowers would be more effective. - Sustained de‑dollarization depends on continued sound macroeconomic and financial policies. ### Non‑bank financing and real estate risks - Bank lending to real estate developers stabilized; FX bond issuance and quasi‑mortgage lending by developers expanded rapidly; real estate prices stable. - NBG temporarily lowered developer equity requirements to redirect activity toward regulated bank credit. - Staff caution: looser mortgage standards could pose financial stability risks; recommend expanding NBG oversight to developers if activities qualify as financial intermediation. ### Consumer and variable‑rate lending - Consumer credit: around 21 percent y/y (elevated), driven by unsecured loans. - Household leverage: around 40 percent of GDP. - Variable‑rate lending expanded by 25 percent y/y, now over half of total loans and around 60 percent of mortgage and corporate lending. - Risks currently non‑systemic but warrant close monitoring, stress testing, and tighter borrower‑based macroprudential measures if needed. ### Virtual assets and VASPs - Crypto accounts held by Georgian VASPs: GEL 111 million in 2025Q4. - Rapid growth since 2023 warrants continued monitoring. - NBG completed registering VASPs with IMF TA support; further regulatory and supervisory framework development important. ### Bank resolution, deposit insurance, and MREL - Banks began contributing to ex‑ante resolution fund in 2025; expected to reach 3 percent of insured deposits by 2033, with interim contingent financing of around 1 percent provided by the World Bank. - Need to secure an MOF backstop for the still‑underfunded deposit insurance fund, per 2021 FSAP recommendations. - MREL for domestic systemically important banks: raised to 15 percent of total loss‑absorbing capacity at end‑2025; will increase to 20 percent by end‑2027. - Contractual bail‑in clauses introduced for all MREL‑eligible instruments; creditor immunity issues for IFIs remain unresolved. ### Consolidated supervision - IMF TA highlighted risks from large banks’ expansion into non‑bank activities and cross‑border operations; recommended extending prudential and governance requirements from solo banks to banking groups on a consolidated basis, in line with Basel standards. - Where group structures or foreign ownership limit oversight, NBG should require intermediate holding companies in Georgia. - Strengthen risk‑based supervision and cross‑border cooperation. ### Authorities’ views on financial sector - Committed to reinforcing the financial policy framework and monitoring identified risks. - Noted operational challenges with some proposed measures and requested further Fund advice, including on mixed‑currency lending. - Emphasized developers are not classified as financial intermediaries and installment schemes do not technically qualify as loans, limiting NBG authority. - On resolution: securing a backstop for the deposit insurance fund remains outstanding; MOF noted banks may need to bear the cost. - IFI creditor‑immunity issues under the MREL framework will be difficult to resolve given lack of precedents. - NBG reviewing Fund TA recommendations to guide next steps. *Source: Content unit 1geoea2026001 — Financial sector sections (excerpt).* --- ### D. Fostering Job‑Rich Growth and Structural Policies ### Labor‑market challenges and diagnostics - Unemployment structurally high, particularly among youth; skill mismatches and weak work incentives amid low wages. - In 2024: - 27 percent of prime‑age workers and 36 percent of youth were overeducated for their jobs. - 40 percent of tertiary educated workers employed in mid‑to‑low‑skilled roles. - Only about a third of prime‑age workers employed in occupations aligned with their training. - Remittances: about 12 percent of GDP (macro level, 2024). - Survey indicators: - 6 percent of households report receiving remittances. - 34 percent receive government transfers excluding pensions. - Staff analysis: remittances and government transfers reduce household employment rates by roughly 17 and 8 percentage points, respectively; aggregate effects translate into a reduction in employment of about 1 percentage point due to remittances and about 1¼ percentage points due to government transfers. ### Policy priorities to sustain growth and jobs - Strengthen vocational education, employer‑led training, and public employment services. - Better link social assistance with work incentives through job search and training requirements. - Support high‑productivity sectors (ICT, renewable energy) to generate well‑paid jobs. - Expand childcare, eldercare, and flexible work arrangements, particularly for women. - Encourage use of remittances and social transfers for productive purposes, including education. - Promote return migration and selectively attract foreign talent. - Maintain engagement with development partners for well‑designed reforms. ### Infrastructure, governance, and competitiveness - Accelerate infrastructure investments and strengthen governance to improve competitiveness and business environment. - Address high costs constraining Middle Corridor potential: sustained transport investment and improved border procedures and logistics efficiency needed. - Advance power sector reforms under a comprehensive long‑term strategy to support energy security and cross‑border flows. - Strengthen anti‑corruption and judicial institutions; timely stakeholder consultation and rigorous cost‑benefit analysis recommended. ### Authorities’ views on growth and labor market - Concurred with constraints identified and advancing targeted policy initiatives (education, vocational training, State Employment Promotion Agency role). - Plans to support local jobs via permit requirements for selected categories of foreign workers. - Committed to road and railway modernization and improving regional cooperation. - Relocation of the anti‑corruption agency under the Supreme Audit Office (SAO) expected to enhance independence. *Source: Content unit 1geoea2026001 — Growth and labor sections (excerpt).* --- ### Debt Sustainability and Sovereign Risk Assessment ### Overall assessment - Overall risk of sovereign stress: Low. - Debt sustainability: Sustainable. - Debt stabilization in the baseline: Yes. ### Recent developments and headline projections - Public debt: peaked around 60 percent of GDP post‑COVID; declined to 34.3 percent of GDP at end‑2025. - Under baseline, public debt projected to decline to about 32 percent of GDP by 2030. - Fiscal deficit projected to remain modest at around 2.2 percent of GDP in the medium term. - Market transaction: January rollover of a USD 500 million Eurobond with five‑year maturity and 5.125 percent coupon; priced at a 152‑basis‑point spread over U.S. Treasuries. ### Debt stock and flow projections (selected figures) - Public debt (percent of GDP): - Actual 2025: 34.3 - Projection 2026: 33.6 - Projection 2027: 32.8 - Projection 2028: 32.5 - Projection 2029: 32.0 - Projection 2030: 31.8 - Projection 2031: 31.8 - Change in public debt (percent of GDP): -1.2 (2025), -0.7 (2026), -0.8 (2027), -0.3 (2028), -0.5 (2029), -0.2 (2030), 0.0 (2031–2032) - Primary deficit (percent of GDP): -0.1 (2025), 0.6 (2026), 0.6 (2027), 0.6 (2028), 0.6 (2029), 0.7 (2030), 0.7 (2031), 0.8 (2032) - Gross financing needs (GFN; percent of GDP): 3.8 (2025), 5.6 (2026), 5.0 (2027), 5.8 (2028), 4.8 (2029), 5.0 (2030), 6.3 (2031) - Debt service (percent of GDP): 3.9 (2025), 4.9 (2026), 4.4 (2027), 5.1 (2028) - Local currency (percent of GDP): 1.9 (2025), 2.0 (2026), 2.8 (2027), 3.6 (2028) - Foreign currency (percent of GDP): 2.0 (2025), 2.9 (2026), 1.6 (2027), 1.6 (2028) ### Medium‑term and tail‑risk analysis - GFN Financeability Module: suggests a low level of risk. - Debt Fanchart Module: indicates a moderate level of risk due to a relatively wide estimated fan width. - Selected indicators: - Fanchart width: 42.8 - Probability of debt not stabilizing (pct): 62.8 - Average GFN in baseline: 5.4 - Bank claims on government (pct bank assets): 7.9 - GFN financeability index: 4.4 - Probabilities (2026–2031): - Prob. of missed crisis (if stress not predicted): 9.1 pct. - Prob. of false alarm (if stress predicted): 55.7 pct. ### Policy implications for debt management - Continue prudent fiscal policy in compliance with the fiscal rule to keep deficits modest and debt below 40 percent of GDP in the medium term. - Operationalize debt management strategy: - Continue shifting toward 65/35 external‑to‑domestic composition while managing exchange rate risk. - Lengthen debt maturity to reach average time to maturity of at least 5.5 years. - Use buybacks and switch operations; consolidate issuances into larger offerings to attract non‑resident investors without increasing annual issuance. - Prepare for climate‑related fiscal costs through reforms and prioritization. *Source: Content unit 1geoea2026001 — Debt sustainability sections (excerpt).* --- ### External Sector Assessment (Annex IV) — Highlights ### Overall assessment and drivers (2025) - External position in 2025 stronger than implied by medium‑term fundamentals (EBA‑lite). - Drivers of stronger position: continued strength of service exports, robust remittances, favorable terms of trade. - Official reserves: rose by more than a third y‑o‑y to 100 percent of the ARA metric or USD 6.2 billion in 2025. ### Key stock figures (2025, percent of GDP) - NIIP: -85.5 - Gross Assets: 51.9 - Debt Assets: 12.4 - Gross Liab.: 137.5 - Debt Liab.: 57.9 ### Current account and projections - CA deficit narrowed to 2.65 percent of GDP in 2025. - CA deficit projected to widen to 5.0 percent of GDP in 2026 and stabilize around 5.0 percent of GDP over the medium term. - Model‑based EBA‑lite estimates: - Cyclically adjusted CA balance: -2.0 percent of GDP in 2025. - CA norm: -4.3 percent of GDP. - CA gap: 2.3 percent of GDP (positive). - Estimated CA gap corresponds to a REER undervaluation of 6.4 percent. - Footnote: current account estimate likely to be revised upward by about 1 percent of GDP (actual closer to 4.0 percent of GDP) due to reinvested earnings. ### Capital and financial account (2025) - Net portfolio inflows: 0.5 percent of GDP. - FDI: 3.6 percent of GDP. - Financial account net inflows: 5.8 percent of GDP in 2025. - Outlook: 2026 flows marked by higher uncertainty due to the Middle East war; medium term expected to stabilize. ### FX intervention and reserves outlook - GIR rose to USD 6.2 billion in 2025 (100 percent of ARA). - Valuation gains: USD 463 million (largely from higher gold prices). - Staff projects GIR to remain stable at USD 6.2 billion in 2026 (100 percent of ARA); medium term reserve coverage projected to increase to around 120 percent of ARA. ### Policy recommendations (external sector) - Continue opportunistic FX purchases to build precautionary buffers. - Limit FX sales to disorderly market conditions. - Enhance competitiveness via structural reforms and targeted infrastructure investments. - Maintain exchange rate flexibility. *Source: Content unit 1geoea2026001 — Annex IV (excerpt).* --- ### Social, Real, Fiscal, and Financial Indicators — Selected numeric highlights - Real GDP growth: 7.5 percent (2025); 6.5 percent (2026); 5 percent by 2028. - Rapid estimate: 9.1 percent y/y in Q1 2026. - Inflation: 4 percent (end‑2025); 5.9 percent (April 2026); expected to converge to 3 percent by mid‑2027. - Policy rate: 8.25 percent (May 2026). - Gross international reserves: USD 6.4 billion (end‑April 2026; ~102 percent of ARA). - GIR (annual series): 4,273 (2021); 4,902 (2024); 5,010 (2025); 4,449 (2026); 6,198 (2027); 6,290 (2028); 6,933 (2029); 7,521 (2030); 8,309 (2031) — (in millions of US$). - Current account (millions of US$): -1,939 (2021); -1,105 (2024); -1,702 (2025); -1,812 (2026); -1,011 (2027). - Current account (percent of GDP): -10.3 (2021); -4.4 (2024); -5.5 (2025); -5.3 (2026); -2.6 (2027). - Trade balance (goods, millions of US$): -3,790 (2021); -5,100 (2024); -6,078 (2025); -6,563 (2026). - Travel revenue (services credit, millions of US$): 1,245 (2021); 3,517 (2024); 4,125 (2025); 4,425 (2026); 4,690 (2027). - Credit to private sector (percent of GDP): 70.0 (2021); 60.3 (2024); 63.6 (2025); 65.5 (2026); 65.9 (2027). - Deposit dollarization: 59.9 (2021); 56.1 (2024); 50.7 (2025); 52.7 (2026); 47.7 (2027). - Credit dollarization: 50.9 (2021); 45.0 (2024); 45.2 (2025); 43.4 (2026); 42.4 (2027). - Public debt (percent of GDP): 49.1 (2021); 39.2 (2024); 38.7 (2025); 35.5 (2026); 34.3 (2027). - Nominal GDP (billion of U.S. dollars): 18.82 (2021); 25.03 (2024); 30.83 (2025); 34.23 (2026); 38.14 (2027). - Nominal GDP (billion of lari): 60.77 (2021); 72.98 (2024); 80.99 (2025); 93.01 (2026); 104.61 (2027). - Real GDP (annual percent change, Table 1 highlights): 10.6 (2021); 11.0 (2024); 7.8 (2025); 9.7 (2026); 7.5 (2027); 6.5 (2028); 5.7 (2029); 5.0 (2030); 5.0 (2031). - CPI, period average: 9.6 (2021); 1.9 (2024); 2.5 (2025); 1.1 (2026); 3.9 (2027); 5.3 (2028). *Source: Content unit 1geoea2026001 — Selected tables and figures (excerpts).* --- ### Annexes — Data and surveillance assessment ### Data adequacy and quality - Data Adequacy Assessment Rating: A. - Questionnaire Results: A. - Sector median ratings: National Accounts A; Prices A; Government Finance Statistics A; External Sector Statistics A; Monetary and Financial Statistics A; Intersectoral Consistency A. - Minor shortcomings: - National accounts: could provide seasonally adjusted GDP at source and investment breakdown (public/private). - External sector: external trade volume and price data could be provided monthly (currently quarterly). ### Timeliness and key periodic observations (selected) - Exchange Rates: latest observation 2026‑05‑13; date received 2026‑05‑14; frequency D. - International Reserve Assets and Reserve Liabilities: latest observation 2026‑04; date received 2026‑05; frequency M. - Consumer Price Index: latest observation 2026‑04; date received 2026‑05; frequency M. - External Current Account Balance: latest observation 2025‑12; date received 2026‑03; frequency Q. - GDP/GNP: latest observation 2025‑12; date received 2026‑03; frequency Q. - Georgia subscribes to the SDDS since May 2010 and publishes data on its National Summary Data Page. *Source: Content unit 1geoea2026001 — Annex V. Data Issues (excerpts).* --- *Italic: Source: 1geoea2026001 — IMF staff assessment and annexes (excerpts).* ### 1. The Optimal Level of Gross International Reserves for Georgia _________________________________ 8 ### 1. The Optimal Level of Gross International Reserves for Georgia ### Context and recent developments - Real GDP grew by 7.5 percent in 2025, the fifth consecutive year above pre-pandemic trend. - Rapid estimates indicate real GDP growth accelerated to 9.1 percent y/y in Q1 2026. - Headline inflation ended 2025 at 4 percent and rose to 5.9 percent in April 2026; core inflation edged up to 3.5 percent. - The policy rate was raised by 25 basis points to 8.25 percent in May 2026. - Gross international reserves stood at USD 6.4 billion—102 percent of the IMF’s Assessing Reserve Adequacy (ARA) metric—at end-April 2026. - The current account deficit declined to 2.6 percent of GDP in 2025, driven by strong service exports and lower goods imports. - The overall fiscal deficit narrowed to 1.5 percent of GDP in 2025; public debt fell below 35 percent of GDP. - Private sector credit growth picked up to 14.9 percent in March 2026 (from 14 percent in 2025); deposit dollarization has declined. ### Findings from the reserve adequacy assessment (Box 1) - Baseline model (10 percent crisis probability) yields an optimal reserve level of about 130 percent of ARA. - Risk-premia channel: a 10-percentage point increase in reserves-to-GDP can lower emerging market borrowing costs by 30-70 basis points; for Georgia this raises optimal reserves by about 5 percent of ARA at lower crisis probabilities. - Dollarization/substitution channel: higher reserves reduce incentives for private FX self-insurance; for Georgia this channel adds about 18 percent of ARA at a 10 percent crisis probability. - FX intervention (FXI) channel: Georgia’s shallow FX market and sensitivity to sentiment justify FXI outside sudden stops; observed FXI patterns add about 10 percent of ARA to optimal reserves. - Combined implication: an optimal reserve range of about 145-150 percent of ARA at a 10 percent crisis probability. - Current coverage (~102 percent of ARA) is adequate under moderate risk scenarios but below levels suggested in high-risk scenarios. ### Outlook and risks (selected projections and sensitivities) - Growth projection: 6.5 percent in 2026, converging to 5 percent by 2028 (medium-term potential). - Current account: projected to widen to 5 percent of GDP in 2026 and remain around this level over the medium term. - Reserve coverage: expected to remain broadly stable in the near term and to strengthen to nearly 120 percent of ARA over the medium term. - Inflation: expected to peak by mid-2026, converging to the 3 percent target by mid-2027. - Shock sensitivity: a 10 percent increase in oil prices, all else equal, raises inflation by 0.4 percentage point, the current account deficit by 0.4 percentage point of GDP, and the fiscal deficit by 0.1 percentage point of GDP. - Key risks: escalation or prolongation of the Middle East war, resolution of the Ukraine war reversing recent gains, a peace agreement between Armenia and Azerbaijan creating competing trade routes, strained EU relations affecting investor sentiment and FDI, and a large but not-yet-baselined USD 6.5 billion real estate project by a UAE investor as a potential upside. ### Policy recommendations and governance priorities - Monetary policy: - Remain focused on bringing inflation sustainably back to target; stand ready to tighten further if price pressures persist or inflation expectations de-anchor. - Consider policy easing only once inflation is clearly converging to target. - Align macroprudential policy with disinflation objectives. - Reserve strategy: - Scope to build further reserve buffers, with staff analysis suggesting a target range of 145-150 percent of the ARA metric for further accumulation as market conditions allow. - Preserve exchange rate flexibility; use FX interventions to smooth excessive volatility driven by sentiment shocks. - Institutional and governance reforms: - Advance NBG governance reform to reinforce institutional credibility: adopt a collegial decision-making model; strengthen independent oversight of the board by ensuring a non-executive majority, raising quorum requirements, assigning the tie-breaking vote to a non-executive, enhancing board member qualification criteria, and prohibiting movements between executive and non-executive roles during a member’s tenure. - Address concerns about anti-competitive practices via the Georgian Competition and Consumer Agency, ensuring prices are market-determined. - Fiscal and financial sector policy: - Preserve fiscal space to support spending priorities and manage risks, including from SOEs. - Keep the financial sector resilient given strong capitalization, liquidity, profitability, and low non-performing loans. *Source: Content unit 1geoea2026001 — 1. The Optimal Level of Gross International Reserves for Georgia (IMF).* ### 16. The authorities broadly concurred with staff’s recommendations, while noting that ### 16. The authorities broadly concurred with staff’s recommendations, while noting that ### Governance and central bank stance - Authorities broadly concurred with staff recommendations; some governance reforms to be implemented gradually. - Emphasized the NBG’s readiness to further tighten the policy stance if warranted and reaffirmed commitment to exchange rate flexibility. - Maintained that higher and more diversified reserves are appropriate for strengthening Georgia's resilience to external shocks. - NBG governance reforms: - Authorities intend to advance reforms related to collegial decision-making and board member qualification requirements in the near term. - Additional measures to strengthen board oversight to be considered at a later stage. - Noted the board has a non‑executive majority when fully staffed and that flexibility in moving between executive and non‑executive roles has functioned effectively in Georgia’s context. ### B. Building Fiscal Space for Priorities and Managing Risks - 2026 fiscal target and outlook: - The 2026 budget deficit target of 2.5 percent of GDP is appropriate and achievable. - Staff project modest overperformance, given conservative growth and tax revenue assumptions and larger-than-expected dividends from the NBG. - Capital spending expected to rebound as procurement backlogs clear, supported by new investments in large transport projects, education infrastructure, and rail modernization; execution risks remain. - Fiscal stance expected to loosen modestly, with the cyclically adjusted primary balance weakening by 0.8 percent of GDP. - If the Middle East conflict significantly affects activity and purchasing power, temporary and well-targeted support could be provided to the most vulnerable within the budget envelope, while avoiding broad‑based subsidies or tax cuts. - Medium-term framework: - Planned deficits of 2.3–2.5 percent of GDP in the coming years would keep debt stable and well below the fiscal rule ceiling. - Namakhvani hydropower plant arbitration expected to generate fiscal costs of up to 1 percent of GDP once legal proceedings are finalized, with the payout spread over time. - Authorities considering increasing local currency issuance and attracting non-resident investors to the domestic debt market to reduce the FX share of debt below the current target of 65 percent; transition should be managed carefully to avoid crowding out private credit and limit risks from higher borrowing costs and sovereign-bank exposures. - Revenue and spending reform priorities: - Streamline tax expenditures; improve mining taxation; strengthen tax administration and the medium-term revenue strategy; enhance spending efficiency. - Tax policy: - Increases in tobacco excises are appropriate. - Differentiated excise rates introduced in 2026 to support domestic producers and curb smuggling risk functioning as quasi-customs duties and should be assessed for consistency with WTO rules. - Excises on cars older than six years were also raised to curb carbon emissions and are expected to be revenue neutral. - Staff noted a broader review of the vehicle taxation framework could be warranted, including consideration of feebate schemes. - Tax administration: - Plans for a repeat TADAT assessment welcomed. - Georgia Revenue Service reorganization and digitalization, including introduction of pre-filled tax returns, expected to improve efficiency. - Expenditure policy: - Advocate education and health spending reviews and stronger active labor market policies to address high youth unemployment and skill mismatches, including enhanced public employment services. - A new methodology to improve targeting of social assistance, developed with World Bank support, expected to be launched in the last quarter of 2026. - SOE governance: - Advance SOE governance reform to improve performance and contain fiscal risks: - Develop clear reform strategy and supportive legislative changes to expand MOF financial oversight and reinforce risk-based monitoring. - Identify, manage, and report quasi-fiscal activities. - Strengthen ownership and governance arrangements: clearer separation of state ownership/policy/regulatory roles; more independent and merit-based board appointments; stronger performance management via Statements of Corporate Intent; more transparent remuneration and accountability frameworks. - Economic Development Corporation of Georgia (consolidating Enterprise Georgia and Georgian Development Fund) should focus on addressing market failures in business access to finance while avoiding crowding out commercial banks and creating fiscal risks. Authorities’ views on fiscal/SOE matters - Reaffirmed commitment to prudent fiscal policy and broadly agreed with staff recommendations. - Emphasized conservative budgeting as a buffer against downside risks, including from the Middle East war. - Confident procurement reforms will strengthen capital spending execution. - Any support related to the war would be targeted, temporary, and within the existing budget envelope. - On SOEs: - Agreed with TA recommendations and updating 2026-27 action plan, including expanding MOF oversight to all corporations with annual turnover exceeding GEL 10 million and major general government SOEs. - SOE law reform to follow later; action plans updated annually and fully implemented over the medium term. - Potential risks from the new development corporation are contained by MOF oversight, including veto powers over key decisions. ### C. Keeping the Financial Sector Resilient - Overall assessment: Financial sector remains healthy, but vigilance is essential to monitor and mitigate evolving risks. - Dollarization and FX lending: - Sound macroeconomic management and macroprudential policies have supported further de-dollarization, although about 80 percent of FX bank loans remain unhedged. - In May, the NBG raised the FX lending eligibility threshold for unhedged borrowers from GEL 750,000 to GEL 1 million and eased reserve requirements on FX liabilities. - Staff assess explicit ceilings on FX lending to unhedged borrowers—including larger firms—would be more effective. - Sustained de-dollarization depends on continued sound macroeconomic and financial policies to strengthen confidence in the economy and the local currency. - Non-bank financing and real estate: - Bank lending to real estate developers has stabilized, but FX bond issuance and quasi-mortgage lending by developers have expanded rapidly; real estate prices have been stable. - NBG temporarily lowered developer equity requirements for business loan and household mortgage eligibility to redirect activity toward regulated bank credit; expected mainly to facilitate mortgage lending. - Staff cautioned looser mortgage standards could pose financial stability risks; recommended expanding NBG oversight to developers if their activities qualify as financial intermediation. - Consumer and variable-rate lending: - Consumer credit growth eased in early 2026 but remains elevated at around 21 percent y/y, driven largely by unsecured loans. - Household leverage remains moderate and stable at around 40 percent of GDP. - Variable-rate lending expanded rapidly (25 percent y/y), raising its share to over half of total loans and around 60 percent of mortgage and corporate lending. - Risks not systemic but could create vulnerabilities; warrant continued close monitoring, stress testing of borrowers’ affordability at higher rates, and, if needed, tighter borrower-based macroprudential measures. - Virtual assets: - Crypto accounts held by Georgian VASPs small at GEL 111 million in 2025Q4 but rapid growth since 2023 warrants continued monitoring. - NBG completed registering VASPs with IMF TA support; further work to develop regulatory and supervisory framework important. - Bank resolution and crisis management: - Banks began contributing to ex-ante resolution fund in 2025; expected to reach 3 percent of insured deposits by 2033, with interim contingent financing of around 1 percent provided by the World Bank. - Need to secure an MOF backstop for the still-underfunded deposit insurance fund, in line with 2021 FSAP recommendations. - MREL for domestic systemically important banks raised to 15 percent of total loss-absorbing capacity at end-2025 and will increase to 20 percent by end-2027. - Contractual bail-in clauses introduced for all MREL-eligible instruments, but creditor immunity issues for IFIs remain unresolved. - Consolidated supervision: - IMF TA highlighted risks from large banks’ expansion into non‑bank activities and across borders; recommended extending prudential and governance requirements from solo banks to banking groups on a consolidated basis, in line with Basel standards. - Where group structures or foreign ownership limit oversight, NBG should require intermediate holding companies in Georgia to capture group‑wide risks. - Strengthen risk‑based supervision and cross‑border cooperation to manage emerging risks from non‑bank and international expansion. Authorities’ views on financial sector - Committed to reinforcing financial sector policy framework and agreed on need to monitor identified risks and deploy mitigation measures as warranted. - Noted operational challenges with some proposed measures (e.g., explicit ceilings on FX lending to unhedged borrowers) and requested further Fund advice, including on mixed‑currency lending. - Emphasized developers are not classified as financial intermediaries and installment schemes do not technically qualify as loans, limiting NBG regulatory authority. - On resolution, securing a backstop for the deposit insurance fund remains outstanding; MOF noted banks may need to bear the cost. - IFI-related creditor‑immunity issues under the MREL framework will be difficult to resolve given lack of precedents. - On consolidated supervision, NBG reviewing Fund TA recommendations to guide next steps. ### D. Fostering Job-Rich Growth - Structural labor-market challenges: - Unemployment remains structurally high, particularly among youth, reflecting skill mismatches and weak work incentives amid low wages, and limited availability of productive jobs. - Factors push high-skilled workers into lower-skill positions and low-skilled workers into informality or emigration. - Policy priorities to sustain growth and job creation: - Strengthen vocational education, employer-led training, and public employment services to align skills with labor market needs. - Better link social assistance benefits with work incentives through job search and training requirements. - Support development of high-productivity sectors such as ICT and renewable energy that generate well-paid jobs. - Expand childcare, eldercare, and flexible work arrangements, particularly for women. - Encourage use of remittances and social transfers for productive purposes, including education. - Promote return migration while selectively attracting foreign talent in sectors facing skill shortages. - Maintain engagement with development partners for well-designed reforms. - Infrastructure and governance: - Accelerate infrastructure investments and strengthen governance to improve competitiveness and business environment. - High costs constrain Middle Corridor potential; need sustained investment in transport infrastructure and improved border procedures and logistics efficiency. - Advance power sector reforms under a comprehensive long-term strategy to support energy security and cross-border flows. - Closer regional coordination critical to unlocking gains and reinforcing Georgia’s role as regional trade and energy hub. - Worsening rule of law indicators and rising corruption perceptions underscore need to strengthen independence, capacity, and effectiveness of anti‑corruption and judicial institutions. - Timely stakeholder consultation and rigorous cost‑benefit analysis of policy changes would enhance predictability and support reform implementation. Authorities’ views on growth and labor market - Concurred with growth constraints identified by staff and advancing targeted policy initiatives. - On unemployment, agree skill mismatches are key and prioritizing education and labor‑market reforms: align higher education with labor‑market needs, expand vocational education and training, and strengthen State Employment Promotion Agency’s role. - Plans to support local jobs via permit requirements for selected categories of foreign workers. - Committed to strengthening connectivity through road and railway modernization, supported by development partners, and improving regional cooperation. - On governance, relocation of the anti‑corruption agency under the Supreme Audit Office (SAO) expected to enhance independence leveraging the SAO’s constitutional protections and operational autonomy. Box 2 — key staff findings on labor markets and non-labor income - Skills mismatch and labor market: - In 2024, 27 percent of prime-age workers and 36 percent of youth were overeducated for their jobs; 40 percent of tertiary educated workers employed in mid-to-low-skilled roles. - Undereducation concentrated in higher-skill sectors and occupations: ICT, finance, managerial and professional roles. - Only about a third of prime‑age workers employed in occupations aligned with their training. - Non-labor income effects: - Remittances amount to about 12 percent of GDP at the macro level (2024). - Only 6 percent of surveyed households report receiving remittances; 34 percent receive government transfers excluding pensions. - Staff analysis finds remittances and government transfers reduce household employment rates by roughly 17 and 8 percentage points, respectively; effects larger for female‑headed households and concentrated among hired employment and secondary jobs. - At the aggregate level, these effects translate into a reduction in employment of about 1 percentage point due to remittances and about 1¼ percentage points due to government transfers. - Policy implications: - Reduce skill mismatches by improving job relevance of education and training. - Strengthen work incentives while preserving adequate social protection. _Italic: Source: 1geoea2026001 - 16. The authorities broadly concurred with staff’s recommendations, while noting that_ ### 29. Despite global headwinds, Georgia’s economy remains resilient, supported by sound ### 29. Despite global headwinds, Georgia’s economy remains resilient, supported by sound ### Recent performance and macroeconomic stance - Real GDP expanded by 7.5 percent in 2025, persistently above its pre-pandemic trend. - Economic activity remained firm in early 2026, with the impact from the Middle East war largely confined to tourism. - Headline inflation rose above the NBG’s 3 percent target in 2025 after two years of undershooting, and reached 5.9 percent in April 2026, reflecting higher energy costs, with a modest overshoot in core inflation. - Fiscal and external buffers have strengthened, with reserves reaching the IMF’s adequacy threshold and public debt declining below 35 percent of GDP. - The financial sector remains sound, though structural challenges persist, notably high youth unemployment and significant income inequality. ### Outlook and projections - Growth: - Expected to slow to 6.5 percent in 2026. - Gradually converging to medium-term potential of 5 percent by 2028. - Inflation: - Expected to peak in mid-2026, driven by higher energy costs. - Expected to return to target by mid-2027 as the output gap narrows. - External sector: - The external position in 2025 was stronger than implied by medium-term fundamentals and desirable policy settings. - Current account deficit expected to widen to 5 percent of GDP in 2026—reflecting higher oil prices and lower tourism receipts—and remain around this level over the medium term. - Gross international reserves are expected to continue rising over the medium term, supported by a gradual pickup in FDI. ### Risks to the outlook - Upside and downside scenarios described: - Escalation of the Middle East war could further reduce tourism from affected countries, raise inflation, and tighten financial conditions. - A more protracted conflict could divert financial and tourism flows from the Gulf region toward Georgia and increase transit along the Middle Corridor. - An end to the war in Ukraine could unwind some recent gains but would support broader regional stability and confidence. - A peace agreement between Azerbaijan and Armenia could lead to alternative trade routes that bypass Georgia, while also boosting regional activity. - Dimmer EU accession prospects could weigh on some FDI inflows; investment from other sources—including a planned large-scale investment from the UAE—presents an upside risk. ### Monetary policy and NBG guidance - The NBG should closely monitor the inflationary impact of ongoing supply shocks while continuing to accumulate reserves as conditions allow. - The NBG has appropriately raised the policy rate in May and signaled readiness to further tighten if price pressures persist or inflation expectations risk becoming de‑anchored. - Easing should be considered only once inflation is clearly converging to target. - Exchange rate flexibility should be preserved, alongside opportunistic reserve accumulation to strengthen market confidence and reinforce external buffers given Georgia’s high dollarization. ### NBG governance reforms - Advancing NBG governance reforms remains essential to strengthen institutional credibility. - Most recommendations from the 2022 Safeguards Assessment have been implemented, with further progress supported by recent IMF TA. - Reforms noted include reallocation of responsibilities among executive board members and strengthening the governor succession framework, alongside plans to adopt a collegial decision-making model and strengthen board member qualification requirements. - Further enhancements to board oversight would help align the framework more closely with international best practices. ### Fiscal policy stance and recommendations - Planned medium-term fiscal deficits below 2.5 percent of GDP remain appropriate, consistent with maintaining public debt at prudent levels. - The projected modest loosening in 202 reflects a rebound in capital spending following last year’s under-execution, with timely project implementation remaining important. - If the conflict materially weakens activity or purchasing power, temporary, well‑targeted support to the most vulnerable could be provided within the budget, while avoiding broad‑based subsidies or tax cuts. - Over the medium term, key measures to create fiscal space: - Streamlining tax expenditures. - Strengthening mining taxation. - Further improving tax administration. - Enhancing spending efficiency. ### SOE governance and fiscal risk management - Advancing SOE governance reforms remains critical to improve performance and mitigate fiscal risks. - Authorities’ plan to update their action plan in line with recent IMF TA is welcome, emphasizing: - Expanding MOF financial oversight over major SOEs. - Improving identification and management of quasi‑fiscal activities. - Next steps: strengthen corporate governance, including clearer ownership arrangements and more independent and merit-based boards. ### Financial sector soundness and vulnerabilities - The banking system remains well capitalized, liquid, and profitable, though continued vigilance is needed as risks evolve. - Potential risks from rapid credit growth—including in consumer, variable‑rate, and developer lending—warrant close monitoring. - Continue efforts to reduce unhedged FX exposures and address emerging risks from non-bank financial activities. - Completing the bank resolution and crisis management framework and advancing consolidated supervision in line with recent IMF TA remain essential. - Digital asset exposures remain limited, but rapid growth points to potential risks; regulatory and supervisory framework for VASPs should be strengthened. ### Structural reforms to sustain growth and job creation - Long-standing structural constraints to address: - High unemployment, particularly among youth, reflecting skill mismatches, weak work incentives, and limited availability of productive jobs. - Staff encourages continued reforms to: - Strengthen vocational education and training. - Improve public employment services. - Better align social assistance with work incentives. - Support high‑productivity sectors. - Improving competitiveness requires: - Continued investment in transport, logistics, and trade facilitation. - Advancing power sector reforms to strengthen energy security and cross-border flows, supported by deeper regional cooperation. - Strengthening anti‑corruption and judicial institutions, maintaining a predictable policy environment, and ensuring timely stakeholder consultation will be key to sustaining business confidence and effective reform implementation. *Source: IMF staff assessment (excerpt).* ### 38. Staff recommend that the next Article IV consultation take place on the standard 12- ### 38. Staff recommend that the next Article IV consultation take place on the standard 12-month cycle. ### Social Indicators - Growth has outpaced peers since 2010, lifting real GDP per capita (PPP) above most comparators. - Reduction in poverty, inequality, and unemployment to historic lows noted. - Remaining challenges: - Poverty and inequality remain higher than in most peers. - Unemployment higher than peers, especially among youth, with a higher share neither in education nor in employment. - Wages lag behind peers, weakening incentives to search for or accept jobs. - Widespread social benefits provide crucial income support for households. - Sources cited within figures: World Development Indicators, International Labor Organization, GEOSTAT, and IMF staff calculations. ### Real Sector Developments - Growth dynamics: - Growth remained strong in 2025, driven largely by ICT, education, and transport services. - Increasing contribution from consumption. - Labor market: - Unemployment remains at historic lows (though higher than in peers). - Labor force participation has edged down. - Real wage growth has slowed amid easing labor demand. - Prices and exchange rate: - Headline inflation has risen above target, with a modest overshoot in core inflation. - The lari has remained broadly stable in both nominal and real effective terms. - Note: Industry includes mining, manufacturing, energy utilities, and others. ### External Sector Developments - Goods and services: - The goods trade balance has fluctuated recently, reflecting shifts in imports amid volatile global oil prices. - Tourism activity has bounced back, though it remains subject to seasonal patterns, with potential for further recovery in the number of tourists (e.g., from Azerbaijan) towards pre-pandemic levels. - Remittances and transfers: - Net money transfers have largely stabilized, with lower flows from Russia offset by higher flows from other countries. - Reserves and investment: - International reserves have surged, supported by strong net FX purchases. - FDI has picked up, though reflecting mostly reinvested earnings. - Selected numeric indicators (Table 2, in millions of U.S. dollars unless otherwise indicated): - Current account balance: -1,939 (2021); -1,105 (2024); -1,702 (2025); -1,812 (2026); -1,011 (2027); -2,154 (2028); -2,175 (2029); -2,492 (2030); -2,744 (2031) - Trade balance (goods): -3,790 (2021); -5,100 (2024); -6,078 (2025); -6,563 (2026); -6,841 (2027); -8,253 (2028); -9,013 (2029); -9,958 (2030); -10,963 (2031) - Exports (goods): 5,539 (2021); 7,536 (2024); 8,119 (2025); 8,630 (2026); 9,632 (2027); 11,072 (2028); 11,946 (2029); 13,110 (2030); 14,359 (2031) - Imports (goods): 9,329 (2021); 12,636 (2024); 14,197 (2025); 15,194 (2026); 16,473 (2027); 19,325 (2028); 20,958 (2029); 23,068 (2030); 25,322 (2031) - Services: credit 2,550 (2021); 5,705 (2024); 7,062 (2025); 7,706 (2026); 8,494 (2027) - Travel revenue (of services credit): 1,245 (2021); 3,517 (2024); 4,125 (2025); 4,425 (2026); 4,690 (2027) and projections rising thereafter to 10,103 (2031) - Gross international reserves (in millions of US$): 4,273 (2021); 4,902 (2024); 5,010 (2025); 4,449 (2026); 6,198 (2027); 6,290 (2028); 6,933 (2029); 7,521 (2030); 8,309 (2031) - Memorandum ratios (percent of GDP where indicated): - Current account balance: -10.3 (2021); -4.4 (2024); -5.5 (2025); -5.3 (2026); -2.6 (2027) - Trade balance (goods): -20.1 (2021); -20.4 (2024); -19.7 (2025); -19.2 (2026); -17.9 (2027) - Exports (goods): 29.4 (2021); 30.2 (2024); 26.4 (2025); 25.2 (2026); 25.3 (2027) - Imports (goods): 49.5 (2021); 50.6 (2024); 46.1 (2025); 44.4 (2026); 43.2 (2027) - Services balance: 3.9 (2021); 10.7 (2024); 11.2 (2025); 11.4 (2026); 12.2 (2027) ### Fiscal Sector Developments - Public debt and financing: - Public debt-to-GDP has declined, with an increasing share in domestic currency. - Decline driven by low deficits, robust growth, and a strong lari. - Financing needs have fallen, thanks to declining primary deficits. - Net public financial worth has strengthened, despite a decline in deposits at the NBG. - Revenue and expenditure trends: - Tax revenue growth moderated in 2025 but remained robust. - Capital spending declined in 2025, partly offset by current spending on government transfers. - Key consolidated government operations (Table 3b, percent of GDP): - Revenue: 25.2 (2021); 26.5 (2024); 27.4 (2025); 27.6 (2026); 27.0 (2027) - Total Expenditure: 31.2 (2021); 29.0 (2024); 29.7 (2025); 29.9 (2026); 28.4 (2027) - Net lending / borrowing: -6.0 (2021); -2.6 (2024); -2.3 (2025); -2.3 (2026); -1.5 (2027) - General government debt: 49.1 (2021); 39.2 (2024); 38.7 (2025); 35.5 (2026); 34.3 (2027) - Detailed government operations (Table 3a, in millions of GEL): - Revenue: 15,313 (2021); 19,280 (2024); 22,125 (2025); 25,695 (2026); 28,215 (2027) - Total Expenditure: 18,939 (2021); 21,145 (2024); 24,008 (2025); 27,804 (2026); 29,741 (2027) - Net lending / borrowing: -3,627 (2021); -1,865 (2024); -1,885 (2025); -2,109 (2026); -1,526 (2027) - Taxes: 13,550 (2021); 17,290 (2024); 19,736 (2025); 23,263 (2026); 25,285 (2027) - Social benefits: 6,342 (2021); 6,331 (2024); 7,112 (2025); 8,145 (2026); 9,122 (2027) - Capital spending (Increase): 4,591 (2021); 5,966 (2024); 6,527 (2025); 7,665 (2026); 6,846 (2027) ### Financial Sector Developments - Credit and loans: - Credit growth has accelerated recently, reversing a downward trend since mid-2024. - Consumer credit has slowed, while business and mortgage credit has picked up. - Credit to the private sector (Table 1): 12.4 (2021); 3.4 (2024); 17.1 (2025); 18.4 (2026); 13.1 (2027) - Credit to the private sector (percent of GDP): 70.0 (2021); 60.3 (2024); 63.6 (2025); 65.5 (2026); 65.9 (2027) - Asset quality and profitability: - Nonperforming loans have remained below pre-pandemic levels. - Bank profitability has remained robust, owing to strong net interest income. - Selected indicators (Table 5, percent): - Nonperforming loans to total gross loans: 1.5–2.6 across reported periods, 2.5 (Dec 2026) - Return on assets (ROA): 3.8–4.5 range across reported periods; 4.0 (Dec 2026) - Return on equity (ROE): 24.8–22.8 range; 22.8 (Dec 2026) - Currency and dollarization: - Interest rate differential between lari and FX deposits has stabilized recently. - Deposit dollarization resumed its downward trend; loan dollarization remained broadly stable. - Deposit dollarization (Table 1): 59.9 (2021); 56.1 (2024); 50.7 (2025); 52.7 (2026); 47.7 (2027) - Credit dollarization (Table 1): 50.9 (2021); 45.0 (2024); 45.2 (2025); 43.4 (2026); 42.4 (2027) - Monetary and banking aggregates (Table 4, selected levels and growths): - Nominal GDP (billions of lari): 60.77 (2021); 72.98 (2024); 80.99 (2025); 93.01 (2026); 104.61 (2027) - Broad money (M3) year-on-year growth: 11.4 (2021); 11.0 (2024); 15.4 (2025); 14.1 (2026); 11.5 (2027) - Reserve Money levels and projections available in Table 4 (Reserve Money in billions of lari and growth rates). ### Macroeconomic Projections and Key Indicators (Table 1 highlights) - Real GDP (annual percent change): 10.6 (2021); 11.0 (2024); 7.8 (2025); 9.7 (2026); 7.5 (2027); 6.5 (2028); 5.7 (2029); 5.0 (2030); 5.0 (2031) - Output Gap (percent): -3.1 (2021); 0.0 (2024); 0.5 (2025); 1.2 (2026); 1.1 (2027); 1.1 (2028); 0.7 (2029); 0.0 (2030); 0.0 (2031) - Nominal GDP (in billion of laris): 60.77 (2021); 72.98 (2024); 80.99 (2025); 93.01 (2026); 104.61 (2027); 116.9 (2028); 128.5 (2029); 139.8 (2030); 151.8 (2031) - Nominal GDP (in billion of U.S. dollars): 18.82 (2021); 25.03 (2024); 30.83 (2025); 34.23 (2026); 38.14 (2027); 43.54 (2028); 48.15 (2029); 52.65 (2030); 57.66 (2031) - GDP per capita (in thousand of U.S. dollars): 5.1 (2021); 6.8 (2024); 8.2 (2025); 8.7 (2026); 9.7 (2027); 11.1 (2028); 12.3 (2029); 13.4 (2030); 14.7 (2031) - CPI, Period average: 9.6 (2021); 1.9 (2024); 2.5 (2025); 1.1 (2026); 3.9 (2027); 5.3 (2028); 3.4 (2029); 3.0 (2030); 3.0 (2031) - General government debt (percent of GDP): 49.1 (2021); 39.2 (2024); 38.7 (2025); 35.5 (2026); 34.3 (2027); 33.6 (2028); 32.8 (2029); 32.5 (2030); 31.9 (2031) *Source: Excerpts from the Georgia country chapter (figures, tables, and notes) as provided in the supplied content.* ### Annex I. Key Recommendations of the 2025 Article IV ### Annex I. Key Recommendations of the 2025 Article IV Consultation ### Fiscal Policy - Preserve buffers under the fiscal rule: Maintain a broadly neutral fiscal stance over the short and medium term, keeping deficits around 2.3-2.5 percent of GDP. - Status: Partial – 2025 budget overperformed due to under-execution of capital expenditures, reducing the debt ratio. Medium term budget plans remain unchanged. - Create room for productive investments: - Strengthen the Medium-Term Revenue Strategy (MTRS); broaden the tax base and rationalize tax expenditures; continue to modernize revenue administration and improve public investment management; conduct targeted reviews to enhance spending efficiency. - Status: Partial – The MTRS has not yet been revised. No expenditure rationalization has been undertaken. Revenue administration reforms are ongoing, the PIM framework has been improved, and the authorities are in the process of developing spending reviews. - Manage fiscal risks, including from SOEs: - Improve MOF financial oversight, SOE operational efficiency, and separation of state’s ownership, regulatory, and policy functions to limit conflicts of interest. - Status: Partial – Pilots of dual MoE-MoF ownership continue, along with strengthened MoF financial oversight. Risk management (oversight and conflict of interest) and corporate governance should be further improved in line with recent IMF TA recommendations. ### Monetary and Exchange Rate Policy - Keep inflation expectations anchored: - Maintain a neutral policy stance while remaining flexible and data driven to manage inflation, supported by exchange rate flexibility and reserve buildup to guard against risks. - Status: Implemented – The NBG maintained a broadly neutral policy stance with unchanged policy rate and raised reserve coverage to above 100 percent of ARA. - Strengthen NBG Governance: - In line with IMF TA, amend NBG law to: (i) ensure a non-executive majority on the NBG’s oversight board and limit discretionary transfers to the government, and (ii) clarify and strengthen the NBG succession framework and board member qualification criteria. Consider moving to a collegial decision-making model. - Status: Partial – The vacant board positions have been filled, restoring a non-executive majority on the NBG’s oversight board, the succession framework has been strengthened, and discretionary transfers have been ruled out. Other key NBG law amendments are pending and should be enacted in line with recent IMF TA recommendations. ### Financial Sector Policies - Keep financial sector resilient: - Maintain financial buffers and vigilance to guard against risks, including from dollarization, non-bank and cross border activities, and virtual assets. Enhance macroprudential and crisis management frameworks to mitigate risks from systemic banks. Improve competition in financial services. - Status: Partial – NBG policies have ensured adequate bank capital, liquidity, and loan loss reserves, mitigated concentration and dollarization risks, and addressed developer lending. VASP registration is complete, but regulation and supervision are pending. Further efforts are needed to enhance bank competition, the resolution framework, and consolidated supervision in line with recent IMF TA. ### Structural Policies - Sustain high growth and make it more inclusive and job-rich: - Improve education, training, and job counselling, as well as agricultural productivity to help address high structural unemployment, low rural labor force participation, outward migration, and informality; invest in transport and logistics infrastructure and improve regional cooperation to foster economic diversification and connectivity; undertake judicial and anti-corruption reforms to improve competitiveness and the business environment. - Status: Partial – Land and education reforms are ongoing, so are infrastructure investments, although there have been some setbacks in public investment execution in 2025. Tackling corruption has been high on the government’s agenda. However, there are no substantial initiatives to improve active labor market policies and address judicial issues in the country. *Source: Annex I. Key Recommendations of the 2025 Article IV Consultation* ### 1. The overall risk of sovereign debt distress is assessed to be low and government debt ### 1. The overall risk of sovereign debt distress is assessed to be low and government debt ### Overall assessment - Overall risk of sovereign stress: Low. - Debt sustainability assessment: Sustainable. - Debt stabilization in the baseline: Yes. - Commentary highlights: - Georgia's overall risk of sovereign stress is assessed as "low", reflecting low levels of vulnerability in both the near and medium-term modules. - Debt is expected to remain stable over the projection period with GFNs remaining at manageable levels. ### Recent debt developments and headline projections - Public debt peaked at around 60 percent of GDP in the aftermath of the COVID-19 pandemic and declined to 34.3 percent of GDP at end 2025. - Under the baseline scenario, public debt is projected to decline further to about 32 percent of GDP by 2030. - The fiscal deficit is projected to remain modest at around 2.2 percent of GDP in the medium-term, consistent with the fiscal rule and a neutral stance. - Key market transaction: In January, the government successfully rolled over a USD 500 million Eurobond with a five-year maturity and a 5.125 percent coupon. It was priced at a 152-basis-point spread over U.S. Treasuries—more than 50 bps below the previous issuance. - Credit ratings noted in the text: - "S P affirmed Georgia’s BB B ratings with a stable outlook in February 202 , while Moody’s maintained its Ba2 rating with a negative outlook in April 2026, citing political and geopolitical risks." ### Authorities’ debt management strategy and actions - Objectives: - Reduce exchange rate risk. - Manage borrowing costs. - Ensure long-term sustainability. - Portfolio target: shift toward a 65/35 external-to-domestic ratio (resumed since 2022 after a temporary pause in 2020). - Maturity target: average time to maturity of at least 5.5 years. - Instruments and operations: - New domestic debt instruments introduced: 3-, 5-, and 7-year treasury bonds—with strong demand for longer maturities. - Buyback operations since 2019, to continue alongside switch operations. - Plan to consolidate some issuances into larger offerings to attract non-resident investors, while keeping the overall annual issuance plan unchanged. - Financing approach for infrastructure: plan to finance upcoming infrastructure projects equally through domestic and external sources to support domestic debt market development and maintain access to diverse funding. ### Medium-term and baseline fiscal-debt dynamics (selected figures from Table 2 and commentary) - Public debt (percent of GDP): - Actual 2025: 34.3 - Projection 2026: 33.6 - Projection 2027: 32.8 - Projection 2028: 32.5 - Projection 2029: 32.0 - Projection 2030: 31.8 - Projection 2031: 31.8 - Projection 2032: 31.9 - Projection 2033: 31.8 - Projection 2034: 31.8 - Projection 2035: 31.8 - Change in public debt (percent of GDP): -1.2 (2025), -0.7 (2026), -0.8 (2027), -0.3 (2028), -0.5 (2029), -0.2 (2030), 0.0 (2031–2032), -0.1 (2033), 0.0 (2034), -0.1 (2035) - Primary deficit (percent of GDP): -0.1 (2025), 0.6 (2026), 0.6 (2027), 0.6 (2028), 0.6 (2029), 0.7 (2030), 0.7 (2031), 0.8 (2032), 0.8 (2033), 0.9 (2034), 1.1 (2035) - Noninterest revenues (percent of GDP): 27.0 (2025), 26.6 (2026), 26.3 (2027), 26.2 (2028), 26.1 (2029), 26.0 (2030), 26.0 (2031), 25.9 (2032), 25.9 (2033), 25.8 (2034), 25.8 (2035) - Noninterest expenditures (percent of GDP): 26.9 (2025), 27.2 (2026), 26.8 (2027), 26.8 (2028), 26.6 (2029), 26.7 (2030), 26.7 (2031), 26.7 (2032), 26.7 (2033), 26.8 (2034), 26.9 (2035) - Automatic debt dynamics contribution (percent of GDP): -2.1 (2025), -1.6 (2026), -0.9 (2027), -0.7 (2028), -0.7 (2029), -0.7 (2030), -0.8 (2031), -0.9 (2032), -1.0 (2033), -1.1 (2034), -1.1 (2035) - Gross financing needs (GFN; percent of GDP): 3.8 (2025), 5.6 (2026), 5.0 (2027), 5.8 (2028), 4.8 (2029), 5.0 (2030), 6.3 (2031), 5.1 (2032), 6.1 (2033), 6.3 (2034), 5.9 (2035) - Of which: debt service (percent of GDP): 3.9 (2025), 4.9 (2026), 4.4 (2027), 5.1 (2028), 4.2 (2029), 4.3 (2030), 5.5 (2031), 4.3 (2032), 5.2 (2033), 5.4 (2034), 4.8 (2035) - Local currency (percent of GDP): 1.9 (2025), 2.0 (2026), 2.8 (2027), 3.6 (2028), 2.8 (2029), 3.0 (2030), 3.6 (2031), 3.1 (2032), 4.0 (2033), 4.3 (2034), 3.8 (2035) - Foreign currency (percent of GDP): 2.0 (2025), 2.9 (2026), 1.6 (2027), 1.6 (2028), 1.4 (2029), 1.3 (2030), 2.0 (2031), 1.2 (2032), 1.2 (2033), 1.1 (2034), 1.1 (2035) - Memo: - Real GDP growth (percent): 7.5 (2025), 6.5 (2026), 5.7 (2027), 5.0 (2028), 5.0 (2029), 5.0 (2030), 5.0 (2031–2035) - Inflation (GDP deflator; percent): 4.5 (2025), 6.8 (2026), 4.0 (2027), 3.6 (2028), 3.5 (2029), 3.5 (2030–2034), 3.5 (2035) - Nominal GDP growth (percent): 12.4 (2025), 11.8 (2026), 9.9 (2027), 8.7 (2028–2035) - Effective interest rate (percent): 5.0 (2025), 5.3 (2026), 5.6 (2027), 5.5 (2028), 5.5 (2029), 5.3 (2030), 5.2 (2031), 4.9 (2032), 4.6 (2033), 4.3 (2034), 3.8 (2035) ### Medium-term risk analysis and financeability - Medium-term tools: - GFN Financeability Module: suggests a low level of risk. - Debt Fanchart Module: indicates a moderate level of risk due to a relatively wide estimated fan width linked to historical volatility. - Selected indicators (Figure 4): - Fanchart width: 42.8 - Probability of debt not stabilizing (pct): 62.8 - Terminal debt level x institutions index: 11.6 - Average GFN in baseline: 5.4 - Bank claims on government (pct bank assets): 7.9 - GFN financeability index: 4.4 - Probabilities (2026–2031): - Prob. of missed crisis (if stress not predicted): 9.1 pct. - Prob. of false alarm (if stress predicted): 55.7 pct. - Staff commentary: gross financing needs are expected to increase to 5.4 percent of GDP, on average, over the medium term, but will remain manageable. The increase in gross financing needs in 2026 is driven by the Eurobond amortization. The increase in the effective interest rate over 2026–31 is driven by (i) a rising share of domestic debt, which carries higher borrowing costs, and (ii) higher interest rates on domestic debt. ### Long-term risk analysis and climate considerations - Long-term outlook: Risk assessed as Low; climate-related investment needs will raise amortization but under the baseline, debt is likely to remain sustainable. - Large-amortization risks: No significant long-term risks associated with large amortizations. Amortization payments projected to peak in 2031 due to the Eurobond rollover in 2026 with a five-year maturity. In such events, GFNs and public debt would remain at comfortable levels. - Climate modules and illustrative scenarios: - Standardized climate adaptation module: adds costs of investment associated with climate change adaptation of 0.8 percent of GDP per year in the medium term and declining thereafter; suggests long-term debt sustainability is generally robust to these additional spending needs. - Standardized mitigation module: assumes frontloading of 5.7 percent of GDP per year until 2038 and zero thereafter (default SRDSF values); such large upfront investments are not likely in Georgia. - Georgia’s 2030 Climate Change Strategy: estimates total budget of GEL 3.5 billion for the 10-year action plan; characterized in the text as "a little over 0.3 percent of GDP." - Staff commentary: Refinancing risks are mitigated by a strong investor base (particularly multilateral loans), a growing domestic debt market, and liquid assets held by the treasury. The historical scenario may overstate risk because it reflects elevated deficits and debt levels during the COVID-19 pandemic. ### Realism and robustness of projections - Realism analysis: past forecast errors do not reveal systematic biases; projected fiscal adjustment and debt reduction are within norms. - Drivers of debt reduction: favorable interest-growth differentials, prudent fiscal policy, strong growth, high inflation, and lari appreciation (especially 2021–23). - Residuals: reflect both exchange rate movements and stock-flow adjustments; large other transactions in 2026 are due to drawdown of government deposits accumulated in 2025. ### Policy implications and recommendations implied by the analysis - Continue prudent fiscal policy in compliance with the fiscal rule to keep deficits modest and debt below 40 percent of GDP in the medium term. - Maintain and operationalize debt management strategy: - Continue shifting toward 65/35 external-to-domestic composition while managing exchange rate risk. - Lengthen debt maturity to reach an average time to maturity of at least 5.5 years. - Use buybacks and switch operations to improve maturity profile and reduce reliance on FX-denominated debt. - Consolidate issuances into larger offerings to attract non-resident investors without increasing overall annual issuance. - Prepare for climate-related fiscal costs through reforms and prioritization to mitigate potential downside risks to growth and debt dynamics. *Sources: Fund staff.* ### Annex IV. Georgia: External Sector Assessment7F8F ### Annex IV. Georgia: External Sector Assessment7F8F ### Overall assessment - Georgia’s external position in 2025 was stronger than the level implied by medium-term fundamentals and desirable policy settings based on the results of the IMF’s EBA-lite current account model. - Drivers of the stronger position in 2025: - continued strength of service exports; - robust remittance receipts; - favorable terms of trade. - Financial inflows increased to a historic high reflecting decreasing external assets for commercial banks mirroring declining dollarization. - Significant reserve accumulation and valuation gains on gold assets contributed to improvement of the net international investment position (NIIP). - Official reserves rose by more than a third y-o-y to 100 percent of the ARA metric or USD 6.2 billion in 2025. ### Potential policy responses - Given that reserves were below the ARA metric in 2024, reserve accumulation enabled by a stronger current account than the estimated norm was appropriate. - Continued opportunistic FX purchases by the NBG would help build precautionary buffers given: - Georgia’s external borrowing needs; - exposure to external shocks; and - relatively high dollarization (Box 1). - FX sales should remain limited to addressing disorderly market conditions. - Authorities should enhance competitiveness by sustaining structural reforms, including targeted infrastructure investments and continued institutional reforms. ### Foreign assets and liabilities: position and trajectory - NIIP trend and drivers: - NIIP narrowed to -86 percent of GDP at end-2025 from -89 percent in 2024. - Improvement largely reflects reserve accumulation, exchange rate appreciation and GDP growth outpacing the nominal increase in external liabilities. - Net portfolio position declined as banks reduced FX assets in line with declining domestic dollarization. - Government external debt declined from 67.1 to 65.8 percent of GDP due to a prudent fiscal stance. - Composition and vulnerabilities: - As of end-2025, FDI accounted for more than half of gross external liabilities. - The share of debt in total liabilities decreased from nearly 50 to 42 percent over the past five years. - Private external debt as percent of GDP declined sharply (by nearly 60 percentage points over the same period), supported by lari appreciation, tighter macroprudential measures and strong GDP growth. - Assessment: - NIIP expected to remain negative to finance the current account deficit, expected to be covered by longer-term and non-debt-creating flows over the medium-term. - Sizeable negative NIIP remains a vulnerability but favorable composition—dominated by FDI, equity and longer-term debt maturities—helps mitigate risks. Key stock figures (2025, percent of GDP) - NIIP: -85.5 - Gross Assets: 51.9 - Debt Assets: 12.4 - Gross Liab.: 137.5 - Debt Liab.: 57.9 ### Current account - 2025 outcome and drivers: - CA deficit narrowed to a record low of 2.65 percent of GDP in 2025, reflecting lower import costs (partly due to weakness in energy prices) and a significant improvement in services exports driven by a surge in tourism, ICT and higher education. - Projections and risks: - CA deficit projected to widen to 5.0 percent of GDP in 2026 with energy prices rising significantly and tourism declining due to the war in the Middle East, with the eventual impact depending on the duration and intensity of the conflict. - Potential start of the Eagle Hills real estate project could increase FDI but will also raise imports; the project has not yet been incorporated into the baseline projections and is expected to bring in approximately USD 6.5 billion in FDI over the next decade. - Over the medium-term, the CA deficit is expected to stabilize at around 5.0 percent of GDP, underpinned by continued fiscal prudence, resilient services exports, and economic growth reverting to potential. - Model-based assessment (EBA-lite): - Cyclically adjusted CA balance estimated at -2.0 percent of GDP in 2025. - Model-estimated CA norm: -4.3 percent of GDP. - CA gap: 2.3 percent of GDP (positive gap). - Model fundamentals imply a norm about 7 percentage points of GDP weaker than the observed cyclically adjusted CA balance. - A moderate positive policy gap emerges due to a tighter cyclically adjusted fiscal stance compared to the rest of the world. - Estimated CA gap corresponds to a REER undervaluation of 6.4 percent. Additional notes: - Footnote estimate: As in previous years, the current account estimate will likely be revised upward by about 1 percent of GDP, with the actual current account deficit reaching closer to 4.0 percent of GDP due to higher reinvested earnings in FDI mirrored in additional negative income in the current account. ### Real exchange rate - Background: - Recent appreciation trend reversed in 2024 amid heightened exchange rate volatility, with the REER depreciating by about 10 percent from its peak in mid-2023 to end-2025. - Movements were more pronounced in nominal terms due to the inflation differential, with the NEER appreciating nearly 78 percent between 2021 and 2024 and stabilizing in 2024–25. - Nominal appreciation resumed in 2025 as the current account improved and election-related volatility subsided. - Assessment: - The REER approach suggests an overvaluation of 7.1 percent. - The CA approach suggests an undervaluation (see CA section) and is preferred in the bottom-line assessment, but REER results provide a complementary perspective. - Given caveats of both approaches and high global uncertainty, continued reserve accumulation, maintaining exchange rate flexibility, and advancing structural reforms are recommended to enhance competitiveness. Model estimate highlights (2025) - CA-Actual: -2.7 - Cyclical contributions (from model): (-) -0.4 - Natural disasters and conflicts: (-) -0.3 - Adjusted CA: -2.0 - CA Norm (from model): -4.3 - Adjusted CA Norm: -4.3 - CA Gap: 2.3 - o/w Relative policy gap: 0.9 - Elasticity: -0.4 - REER Gap (in percent): -6.4 (CA-based) and 6.9 (REER-based) ### Capital and financial accounts: flows and policy measures - 2025 flows and drivers: - With uncertainty easing and current account strengthening, dollarization declined and banks reduced foreign portfolio positions, resulting in net portfolio inflows of 0.5 percent of GDP (a swing of nearly 4 percentage points of GDP relative to 2024). - Together with robust private external borrowing and a recovery in FDI of 3.6 percent of GDP, the financial account registered net inflows of 5.8 percent of GDP. - These flows more than financed the current account deficit and contributed to significant reserve accumulation in 2025. - Outlook and risks: - Financial flows in 2026 likely to be marked by higher uncertainty due to the war in the Middle East and potentially tighter financial conditions, but there are upside risks (e.g., funds diverted from the Gulf seeking safer havens). - Medium-term: financial flows expected to stabilize in line with CA financing needs, supported by portfolio inflows, external borrowing, and FDI. - Assessment: - The overall balance of payments surplus in 2025 reflects the narrowing CA deficit, the reversal of portfolio outflows and a modest improvement in FDI. - Going forward, maintaining exchange rate flexibility and enhancing external competitiveness will be key to mitigating risks from potential capital outflows. ### FX intervention and reserves level - 2025 outcome: - Gross international reserves (GIR) rose to a historic high of USD 6.2 billion in 2025 (100 percent of the ARA metric), up from USD 4.4 billion in 2024. - Rise in reserves reflects: - marked narrowing of the current account deficit; - strong financial inflows; - valuation gains of USD 463 million, primarily reflecting higher gold prices which boosted the value of NBG’s gold reserve assets to about .3 percent of reserves at end-2025. - Projections and policy guidance: - Staff projects GIR to remain stable at USD 6.2 billion in 2026 (100 percent of the ARA metric), assuming commercial banks would largely provide the additional external financing needed for the central bank to at least retain reserves at the 100 percent of ARA threshold despite a higher current account deficit. - Over the medium term, reserve coverage is projected to increase to around 120 percent of ARA, in line with the authorities’ objective to strengthen FX buffers and assuming continued resilience in external receipts from emerging sectors and FDI to support infrastructure spending. - The NBG should continue opportunistic FX purchases and limit FX sales to addressing disorderly market conditions, consistent with IPF guidance and staff analysis (Box 1). *Prepared by Mehmet Cangul (SPR).* ### Annex V. Data Issues ### Annex V. Data Issues ### Data Adequacy Assessment for Surveillance - Data Adequacy Assessment Rating: A - Questionnaire Results: A - Assessment by sector (Median Rating): National Accounts A; Prices A; Government Finance Statistics A; External Sector Statistics A; Monetary and Financial Statistics A; Intersectoral Consistency A - Detailed Questionnaire Results — Data Quality Characteristics: - Coverage: A across sectors - Granularity: - Government Finance Statistics: top cell A (government operations data); bottom cell A (public debt statistics) - Monetary and Financial Statistics: top cell A (Monetary and Financial Statistics data); bottom cell A (Financial Soundness indicators) - Consistency: A in reported cells - Frequency and Timeliness: A across sectors - Overall interpretation: "A The data provided to the Fund are adequate for surveillance." ### Rationale and Data Shortcomings - Staff rationale: "The data available in all sectors are of high quality and timely." - Minor shortcomings identified: - National accounts: could provide seasonally adjusted GDP at source and a breakdown of investment into public and private sectors. - External sector: external trade volume and price data could be provided at a monthly frequency (currently available quarterly). ### Changes since the last Article IV consultation - "Aggregate ratings remain unchanged from the previous AIV Consultation (2025)." ### Corrective actions and capacity development priorities - Planned capacity development (CD) support includes: - Residential property statistics - Expanding the institutional coverage of government finance statistics ### Use of data and estimates in Article IV consultations - Social and labor indicators (per capita GDP (PPP), poverty, inequality, unemployment, wages, coverage of social benefits) sourced from World Bank (WDI) and International Labor Organization (ILO). - Rule of law and corruption perceptions data sourced from World Justice Project and Transparency International. - "Use of data and/or estimates in Article IV consultations in lieu of official statistics available to staff." (listed items above) ### Other data gaps - "Staff do not see any key data gaps outside of those identified in the questionnaire." ### Data Standards Initiatives - Georgia subscribes to the Special Data Dissemination Standard (SDDS) since May 2010 and publishes data on its National Summary Data Page. - "The latest SDDS Annual Observance Report is available on the Dissemination Standards Bulletin Board (https://dsbb.imf.org/)." ### Table of Common Indicators Required for Surveillance (As of May 15, 2026) — Selected entries - Exchange Rates - Date of Latest Observation: 2026-05-13 - Date Received: 2026-05-14 - Frequency of Data: D - Frequency of Reporting: D - Expected Frequency: D - International Reserve Assets and Reserve Liabilities of the Monetary Authorities - Date of Latest Observation: 2026-04 - Date Received: 2026-05 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1W - Announced Timeliness: 7D - Reserve/Base Money - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 2W - Announced Timeliness: 7D - Broad Money - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: 20D - Central Bank Balance Sheet - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 2W - Announced Timeliness: 7D - Consolidated Balance Sheet of the Banking System - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: 20D - Total assets of other depository corporations - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: 20D - Total credit from other depository corporations - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: 20D - Interest Rates - Date of Latest Observation: 2026-05-13 - Date Received: 2026-05-14 - Frequency of Data: D - Frequency of Reporting: D - Expected Frequency: D - Consumer Price Index - Date of Latest Observation: 2026-04 - Date Received: 2026-05 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: 5D - Revenue, Expenditure, Balance and Composition of Financing — General Government - Date of Latest Observation: 2026-04 - Date Received: 2026-05 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: A - Announced Frequency: Q - Expected Timeliness: 2Q - Announced Timeliness: NLT 2M - Revenue, Expenditure, Balance and Composition of Financing — Central Government - Date of Latest Observation: 2026-04 - Date Received: 2026-05 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 1M - Announced Timeliness: NLT 1M - Stocks of Central Government and Central Government-Guaranteed Debt - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: Q - Announced Frequency: Q - Expected Timeliness: 1Q - Announced Timeliness: NLT 1M - Total stock of General Government Debt - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: Q - Announced Frequency: ... - Expected Timeliness: 4M - Announced Timeliness: ... - External Current Account Balance - Date of Latest Observation: 2025-12 - Date Received: 2026-03 - Frequency of Data: Q - Frequency of Reporting: Q - Expected Frequency: Q - Announced Frequency: Q - Expected Timeliness: 1Q - Announced Timeliness: 1Q - Exports and Imports of Goods and Services - Date of Latest Observation: 2026-03 - Date Received: 2026-04 - Frequency of Data: M - Frequency of Reporting: M - Expected Frequency: M - Announced Frequency: M - Expected Timeliness: 8W - Announced Timeliness: 19D - GDP/GNP - Date of Latest Observation: 2025-12 - Date Received: 2026-03 - Frequency of Data: Q - Frequency of Reporting: Q - Expected Frequency: Q - Announced Frequency: Q - Expected Timeliness: 1Q - Announced Timeliness: 80D - Gross External Debt - Date of Latest Observation: 2025-12 - Date Received: 2026-03 - Frequency of Data: Q - Frequency of Reporting: Q - Expected Frequency: Q - Announced Frequency: Q - Expected Timeliness: 1Q - Announced Timeliness: 1Q - International Investment Position - Date of Latest Observation: 2025-12 - Date Received: 2026-03 - Frequency of Data: Q - Frequency of Reporting: Q - Expected Frequency: Q - Announced Frequency: Q - Expected Timeliness: 1Q - Announced Timeliness: 1Q *Source: 1geoea2026001 - Annex V. Data Issues* --- _Source: https://www.imf.org/-/media/files/publications/cr/2026/english/1geoea2026001.pdf_