IMF Staff Concludes Visit to Georgia
IMF News, February 14, 2018
Source details
- Canonical URL
- IMF Staff Concludes Visit to Georgia
Other formats
Bibliographic details
- Published: February 14, 2018
Mission timing and leadership
- Visit dates: February 7-13, 2018.
- Press release date: February 14, 2018.
- Team leader: Ms. Mercedes Vera-Martin.
- Meetings included: First Deputy Prime Minister Kumsishvili; Governor of the National Bank Gvenetadze; Minister of Finance Bakhtadze; other senior officials; representatives of the private sector, civil society, and the diplomatic community.
- Future engagement: forthcoming Article IV consultation and second review of Georgia’s IMF-supported program in April.
Economic performance in 2017
- Growth in 2017: 4.8 percent, driven by consumption and external demand.
- Drivers of growth: rapid growth in exports, tourism, and remittances.
- Current account deficit: narrowed to 7 percent of GDP through 2017Q3.
Inflation and monetary policy
- Inflation in 2017: reached 6.7 percent by end-year, above target, influenced by higher excise rates on fuel and tobacco.
- Monetary policy action: National Bank of Georgia increased the policy rate by 25 basis points, to 7¼ percent, in mid-December.
- Subsequent inflation: annual inflation declined to 4.3 percent in January 2018.
Fiscal performance
- Preliminary fiscal outcome for 2017: fiscal deficit (program definition) reached 2.9 percent of GDP.
- Comparison to projection: ½ percentage point lower than projected.
- Fiscal drivers: broad-based revenue strength; current primary expenditure remained contained; public investment expanded.
- Policy priority: containing current spending and improving revenue collection to increase public investment and address infrastructure bottlenecks.
Structural reforms and policy recommendations
- Authorities’ actions: steps taken to strengthen revenue administration, support capital market development, and improve financial safety nets.
- Legislative progress: draft laws submitted to Parliaments on public-private partnership and pension reforms.
- Policy objectives: mobilize domestic savings, increase private investment, diversify the economy, boost medium-term growth, create jobs, and improve living standards.
- Opportunity: the recent rebound in growth offers an opening to advance these reforms.
IMF Staff statement issued at the conclusion of the mission (February 14, 2018).