{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Georgia",
  "publication": "IMF News, July 22, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/07/22/pr-25259-georgia-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Georgia on a lapse of time basis on July 21, 2025. The authorities have consented to the publication of the Staff Report prepared for this consultation.",
  "publishDate": "2025-07-22",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The Executive Board completed the Article IV Consultation for Georgia on a lapse of time basis on July 21, 2025. The authorities consented to the publication of the Staff Report.\n- Georgia has shown remarkable resilience amid heightened domestic and geopolitical uncertainty, with strong growth, near target inflation, and moderate debt levels.\n- Near-term priorities include building further reserve buffers, strengthening central bank and state-owned enterprise governance, and advancing structural reforms to improve labor market outcomes and expand economic opportunities."
    },
    {
      "heading": "Economic performance and outlook",
      "content": "- Recent performance:\n  - Annual growth has averaged over 9 percent since 2021.\n  - Headline inflation has returned to target after undershooting for two years.\n  - Public debt declined to 36 percent of GDP in 2024.\n- Projections:\n  - Real GDP growth: 7.2 percent in 2025; converge to 5 percent in the medium term.\n  - Inflation: projected to remain near the 3 percent target.\n  - Current account deficit: projected to stabilize around 5 percent of GDP.\n  - Reserves: projected to improve gradually, supported by opportunistic FX purchases and a recovery in FDI.\n- Sector drivers: continued strength in tourism, ICT, and transport services; immigration, financial inflows, and transit trade linked to the war in Ukraine have supported growth."
    },
    {
      "heading": "Risks to the outlook",
      "content": "- Balanced risks amid high global uncertainty and political tensions.\n- External risks:\n  - Resolution of the war in Ukraine could reverse migration and transit trade gains; reconstruction and regional stability could offset impacts.\n  - Indirect effects from weaker investor sentiment, slower trading partner growth, or supply chain disruptions could weigh on exports and raise import costs.\n  - Potential benefit from lower oil prices and trade diversion.\n- Domestic risks:\n  - Heightened political uncertainty and potential sanctions could dampen FDI and tourism and pressure the lari.\n- Buffers: Georgia’s fiscal and financial buffers expected to help cushion adverse shocks."
    },
    {
      "heading": "Monetary policy and National Bank of Georgia (NBG) governance",
      "content": "- Policy stance:\n  - NBG should maintain a broadly neutral policy stance, remain flexible and data driven.\n  - With inflation near target and the policy rate close to neutral, the current stance is appropriate; caution warranted given global uncertainty and rising domestic food prices.\n  - Opportunistic reserve accumulation should be prioritized while preserving exchange rate flexibility.\n- Operational recommendations:\n  - Avoid actions that could undermine policy transmission and credibility, such as sustained deviations between interbank and policy rates.\n  - Provide clearer communication on the balance of risks and policy rationale.\n- Governance recommendations:\n  - Strengthen NBG governance and independence: ensure a non-executive board majority; limit discretionary financial transfers to the government; clarify succession rules for the governor; strengthen board member qualifications; adopt a collegial decision-making model."
    },
    {
      "heading": "Fiscal policy, SOEs, and public finances",
      "content": "- Fiscal stance and targets:\n  - Fiscal policy is well calibrated; a neutral medium-term fiscal stance with deficits below 2.5 percent of GDP would help stabilize the debt ratio well below the fiscal rule ceiling.\n- Revenue and spending:\n  - Advance revenue mobilization via tax policy and administration reforms to expand the tax base and streamline tax expenditures, based on a strengthened medium-term revenue strategy with timelines and expected yields.\n  - Improve spending efficiency through better public investment management processes and spending reviews.\n  - Better target social assistance to the most vulnerable; improve public works program and employment incentives.\n- SOE reform:\n  - Move expeditiously to develop and implement a reform roadmap.\n  - Ensure a strong oversight role for the Ministry of Finance.\n  - Separate the state’s shareholder, regulatory, and policy functions and strengthen corporate governance to contain fiscal risks."
    },
    {
      "heading": "Financial sector and macroprudential framework",
      "content": "- System soundness and vulnerabilities:\n  - Financial sector is sound; reforms have advanced, but further steps needed to strengthen resilience and address evolving risks.\n  - Continue efforts to reduce dollarization and monitor rapid consumer loan growth and lari funding pressures.\n- Policy priorities:\n  - Enhance macroprudential and crisis management frameworks.\n  - Fully operationalize the resolution framework and strengthen deposit insurance by resolving remaining legal and operational issues.\n  - Establish an effective supervisory framework for virtual asset service providers and develop a consolidated supervision framework for cross-border and nonbank activities.\n  - Improve competition in financial services, including through open banking."
    },
    {
      "heading": "Structural reforms for inclusive, job-rich growth",
      "content": "- Priorities:\n  - Address high structural unemployment, low agricultural productivity, and skill gaps through improved vocational training, teacher quality, and targeted agricultural support.\n  - Harness emigration benefits by promoting return migration, leveraging remittances, and attracting foreign talent.\n  - Continue infrastructure investment and regional integration to reduce transport and logistics costs and boost competitiveness.\n  - Reinforce judicial independence, empower the Anti-Corruption Bureau, and ensure effective enforcement of asset declaration reforms in light of recent governance backsliding."
    },
    {
      "heading": "Staff recommendation",
      "content": "- Staff recommend that the next Article IV consultation take place on the standard 12-month cycle."
    },
    {
      "heading": "Key statistics (selected indicators, 2024-30)",
      "content": "- Real GDP (annual percentage change): 2024: 9.4; 2025: 7.2; 2026: 5.3; 2027: 5.0\n- Nominal GDP (in billions of laris): 2024: 91.9; 2025: 102.5; 2026: 111.7; 2027: 121.5; 2028: 131.9; 2029: 143.4; 2030: 155.9\n- Nominal GDP (in billions of U.S. dollars): 2024: 33.8; 2025: 36.7; 2026: 39.2; 2027: 41.4; 2028: 43.6; 2029: 46.1; 2030: 48.6\n- GDP per capita (in thousands of U.S. dollars): 2024: 9.1; 2025: 9.9; 2026: 10.6; 2027: 11.2; 2028: 11.8; 2029: 12.5; 2030: 13.2\n- GDP deflator, period average: 2024: 3.8; 2025: 4.1; 2026: 3.5\n- CPI, period average: 2024: 1.1; 2025: 3.4; 2026: 3.1; 2027: 3.0\n- CPI, end-of-period: 2024: 1.9; 2025: 3.6\n- Consolidated government operations (in percent of GDP): Revenue and grants: 2024: 28.0; 2025: 27.7; 2026: 27.8; 2027: 27.6\n  - o.w. Tax revenue: 2024: 25.3; 2025: 25.0; 2026: 25.6; 2027: 25.8\n  - Total Expenditure: 2024: 30.3; 2025: 30.0; 2026: 30.1; 2027: 29.9; 2028: 29.8\n  - Current expenditures: 2024: 22.5; 2025: 22.6\n  - Net acquisition of nonfinancial assets: 2024: 7.7; 2025: 7.4; 2026: 7.5; 2027: 7.3\n  - Net lending/borrowing (GFSM 2001): 2024: -2.3; 2025: -2.2\n  - Augmented net lending/borrowing 1/: 2024: -2.4\n- Public debt: 2024: 36.1; 2025: 34.7; 2026: 34.1; 2027: 34.3; 2028: 34.5; 2029: 34.9; 2030: 35.7\n  - o.w. Foreign-currency denominated: 2024: 25.2; 2025: 23.1; 2026: 22.0; 2027: 21.7; 2028: 20.9; 2029: 20.0; 2030: 18.9\n- Money and credit:\n  - Credit to the private sector: 2024: 18.5; 2025: 13.7; 2026: 9.0; 2027: 8.7; 2028: 8.6\n  - In constant exchange rate: 2024: 17.0; 2025: 15.5; 2026: 8.5\n  - Broad money: 2024: 14.5; 2025: 13.3; 2026: 11.5; 2027: 11.3\n  - Excluding FX deposits: 2024: 10.4; 2025: 11.9; 2026: 11.7; 2027: 11.6\n  - Deposit dollarization (in percent of total): 2024: 52.7; 2025: 52.1; 2026: 51.9; 2027: 51.7; 2028: 51.4; 2029: 51.2; 2030: 51.0\n  - Credit dollarization (in percent of total): 2024: 42.9; 2025: 42.5; 2026: 42.1; 2027: 41.7; 2028: 41.3; 2029: 40.9; 2030: 40.5\n  - Credit to GDP (in percent) 2/: 2024: 66.0; 2025: 67.4\n- External sector (in percent of GDP; unless otherwise indicated):\n  - Current account balance (in billions of US$): 2024: -1.5; 2025: -1.6; 2026: -1.8; 2027: -2.0; 2028: -2.1\n  - Current account balance: 2024: -4.4; 2025: -4.6; 2026: -4.8; 2027: -4.9; 2028: -5.0\n  - Trade balance: 2024: -19.2; 2025: -18.9; 2026: -19.1; 2027: -19.3; 2028: -19.4\n  - Terms of trade (percent change): 2024: -2.8; 2025: -0.2; 2026: 0.1; 2027: -0.3; 2028: 0.5; 2029: -0.6\n  - Gross international reserves (in billions of US$): 2024: 4.4; 2025: 4.7; 2026: 4.9; 2027: 5.5; 2028: 6.2; 2029: 6.8; 2030: 7.1\n    - In percent of IMF ARA metric 3/: 2024: 79.6; 2025: 81.1; 2026: 82.4; 2027: 88.0; 2028: 95.5; 2029: 100.5; 2030: n.a.\n    - In months of next year's imports: 2024: 2.7; 2025: 2.6; 2026: 2.9\n  - Gross external debt: 2024: 66.8; 2025: 62.4; 2026: 58.5; 2027: 55.9; 2028: 53.0; 2029: 49.4; 2030: 45.7\n\nSource: IMF Executive Board Concludes 2025 Article IV Consultation with Georgia (Press Release No. 25/259, July 22, 2025).\n\n---\n\n\n References\n\n- Georgia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/en/Countries/GEO\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/07/22/pr-25259-georgia-imf-executive-board-concludes-2025-article-iv-consultation"
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    "Published: July 22, 2025",
    "The Executive Board completed the Article IV Consultation for Georgia on a lapse of time basis on July 21, 2025. The authorities consented to the publication of the Staff Report.",
    "Georgia has shown remarkable resilience amid heightened domestic and geopolitical uncertainty, with strong growth, near target inflation, and moderate debt levels.",
    "Near-term priorities include building further reserve buffers, strengthening central bank and state-owned enterprise governance, and advancing structural reforms to improve labor market outcomes and expand economic opportunities.",
    "Recent performance:",
    "Projections:",
    "Sector drivers: continued strength in tourism, ICT, and transport services; immigration, financial inflows, and transit trade linked to the war in Ukraine have supported growth.",
    "Balanced risks amid high global uncertainty and political tensions.",
    "External risks:",
    "Domestic risks:",
    "Buffers: Georgia’s fiscal and financial buffers expected to help cushion adverse shocks.",
    "Policy stance:",
    "Operational recommendations:",
    "Governance recommendations:",
    "Fiscal stance and targets:",
    "Revenue and spending:",
    "SOE reform:",
    "System soundness and vulnerabilities:",
    "Policy priorities:",
    "Priorities:",
    "Staff recommend that the next Article IV consultation take place on the standard 12-month cycle.",
    "Real GDP (annual percentage change): 2024: 9.4; 2025: 7.2; 2026: 5.3; 2027: 5.0",
    "Nominal GDP (in billions of laris): 2024: 91.9; 2025: 102.5; 2026: 111.7; 2027: 121.5; 2028: 131.9; 2029: 143.4; 2030: 155.9",
    "Nominal GDP (in billions of U.S. dollars): 2024: 33.8; 2025: 36.7; 2026: 39.2; 2027: 41.4; 2028: 43.6; 2029: 46.1; 2030: 48.6",
    "GDP per capita (in thousands of U.S. dollars): 2024: 9.1; 2025: 9.9; 2026: 10.6; 2027: 11.2; 2028: 11.8; 2029: 12.5; 2030: 13.2",
    "GDP deflator, period average: 2024: 3.8; 2025: 4.1; 2026: 3.5",
    "CPI, period average: 2024: 1.1; 2025: 3.4; 2026: 3.1; 2027: 3.0",
    "CPI, end-of-period: 2024: 1.9; 2025: 3.6",
    "Consolidated government operations (in percent of GDP): Revenue and grants: 2024: 28.0; 2025: 27.7; 2026: 27.8; 2027: 27.6",
    "Public debt: 2024: 36.1; 2025: 34.7; 2026: 34.1; 2027: 34.3; 2028: 34.5; 2029: 34.9; 2030: 35.7",
    "Money and credit:",
    "External sector (in percent of GDP; unless otherwise indicated):",
    "[Georgia and the IMF](http://www.imf.org/external/country/GEO/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/en/Countries/GEO](http://www.imf.org/en/Countries/GEO)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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