Press Release No. 05/135

An International Monetary Fund (IMF) staff mission issued the following statement today in Tbilisi:

"An IMF team visited Georgia June 1-7, 2005 to review recent developments and continue discussions for the second review under the government's IMF-supported economic program. The mission met with Prime Minister Nogaideli, the Ministers of Finance, Economy, and Energy, the State Minister for Economic Reform, the President of the National Bank of Georgia, other senior government officials, representatives of civil society and members of parliament.

"Georgia's macroeconomic performance continues to be strong with real GDP growth of 6.2 percent in 2004. Fiscal performance in 2004 was impressive, especially the improvement in revenue collections stemming from stronger tax enforcement. Preliminary indications are that this performance has continued in early 2005.

"Among the issues discussed with the Georgian authorities was the concern about inflation. The mission welcomed the authorities' commitment to keeping inflation at single-digit rates and its willingness to take necessary fiscal actions if inflationary pressures intensify in the coming months.

"During the visit, the mission reached understandings on an economic program for 2005. Based on these understandings, the mission intends to propose to IMF management and the Executive Board that the second review under the PRGF arrangement be completed. Approval of the review would enable Georgia to draw an amount equivalent to SDR14 million under the arrangement, equivalent to about US$20 million."