Georgia: Staff Concluding Statement of the 2026 Article IV Mission
IMF News, April 7, 2026
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- Published: April 7, 2026
Mission summary and overarching assessment
- IMF mission led by Mr. Alejandro Hajdenberg conducted discussions from March 25 to April 7, 2026, in Tbilisi.
- Georgia’s economic performance described as robust, supported by sound macroeconomic management and policies.
- Outlook: becoming more challenging amid rising global uncertainty, notably from the war in the Middle East; assuming the conflict is short-lived, growth expected to remain strong but moderate.
- Key strengths: strengthened external position, historic-high gross international reserves, disciplined fiscal policy, low public debt.
- Main near-term focus: preserve macro-financial stability and credibility, accelerate structural reforms to sustain strong growth and job creation.
Recent economic developments, outlook, and risks
- Growth:
- Real GDP growth reached 8.4 percent in January-February 2026, up from 7.5 percent in 2025.
- Activity drivers (supply): sustained expansion in information and communication technology (ICT), transport, and education services.
- Activity drivers (demand): private consumption supported by moderating but solid real wage and consumer credit growth.
- Projection: real GDP growth projected to ease to 5.3 percent in 2026 before converging to potential rate of around 5 percent in the medium term.
- Inflation:
- Headline inflation: ended 2025 at 4 percent; stood at 4.3 percent in March 2026.
- Core inflation: remained below the National Bank of Georgia’s (NBG) 3 percent target.
- Projection: inflation projected to stay elevated in the first half of 2026 and converge to target by mid-2027.
- External sector:
- Current account deficit narrowed to 2.6 percent of GDP in 2025.
- Gross international reserves rose to historic highs, exceeding the IMF’s reserve adequacy threshold for the first time since 2022.
- Projection: current account deficit projected to widen to 5 percent of GDP in 2026 and stabilize around this level over the medium term.
- Risks: exposure to volatile energy prices and tourism receipts; potential impacts from escalation in the Middle East, peace developments in Ukraine, and Azerbaijan–Armenia relations.
- Fiscal:
- Fiscal deficit declined well below budget targets in 2025; public debt fell below 35 percent of GDP.
- 2026 budget targets a deficit of 2.5 percent of GDP, envisaging a rebound in capital spending.
- Outturn projected to be somewhat lower than budgeted, supported by higher-than-expected NBG dividends and strong revenue performance.
- Successful rollover of a $500 million Eurobond in January 2026 cited as evidence of investor confidence.
Policy priorities and recommendations
- Monetary and exchange rate policies:
- Monetary policy should focus on ensuring inflation returns sustainably to target.
- NBG has signaled readiness to tighten if inflationary pressures persist, second-round effects emerge, or inflation expectations risk becoming de‑anchored.
- Preserve exchange rate flexibility; limit FX interventions to smoothing episodes of excessive volatility.
- Continue opportunistic reserve accumulation to reinforce precautionary buffers in a highly dollarized economy.
- NBG governance:
- Advance NBG governance reform to strengthen institutional safeguards.
- Most recommendations of the IMF’s 2022 Safeguards Assessment implemented, including eliminating possibility of discretionary transfers to the government.
- Continue reforms on collegial decision-making, board member qualification requirements, reallocating responsibilities among executive members, and strengthening the succession framework for the Governor.
- Further progress needed to fully align governance with international best practices.
- Fiscal policy:
- Maintain a broadly neutral fiscal stance over the medium term to stabilize public debt around current level.
- If conflict significantly affects activity and purchasing power, provide temporary and well-targeted support to the most vulnerable within the budgetary perimeter; avoid broad‑based subsidies or tax cuts.
- Ensure full and timely execution of capital spending to support medium-term growth.
- Streamline tax expenditures; improve mining taxation; further improve tax administration; enhance spending efficiency.
- SOE governance:
- Advance SOE governance reforms to improve performance and contain fiscal risks.
- Authorities updating action plan in line with IMF technical assistance; expand Ministry of Finance’s financial oversight over major SOEs; improve assessment and management of quasi-fiscal activities.
- Strengthen corporate governance and other reform areas.
- Financial sector policies:
- Banking system remains well capitalized, liquid, and profitable; continued vigilance warranted.
- Priorities: monitor rapid consumer and variable‑rate lending, lending by real estate developers; reduce unhedged FX lending; complete bank resolution and crisis management framework; advance consolidated supervision of banks’ nonbank and cross-border activities per IMF TA recommendations.
- Monitor rapid growth of digital asset holdings and develop regulatory/supervisory framework for virtual asset service providers.
- Labor market and structural reforms:
- Address structurally high unemployment, particularly among youth, driven by skill mismatches and weak work incentives amid low wages.
- Focus on vocational education and training, improving public employment services, aligning social assistance with work incentives, and supporting high-productivity sectors.
- Authorities’ reform agenda in education and the labor market, plus initiatives for entrepreneurship and capital-market development, noted as supportive.
- Infrastructure and business environment:
- Strengthen energy, transport, and logistics infrastructure to boost competitiveness and connectivity.
- Accelerate infrastructure investment and deepen regional cooperation to reinforce Georgia’s role as a trade and transit hub.
- Strengthen anti-corruption and judicial institutions; maintain predictable, market-friendly policy environment.
- Undertake timely stakeholder consultation and cost-benefit analysis of policy changes.
Key selected economic and financial indicators (2023–31) — selected figures preserved exactly as in source
- Real GDP (annual percentage change): 2023: 7.8; 2024: 9.7; 2025: 7.5; 2026: 5.3; 2027: 5.0.
- Nominal GDP (in billion of laris): 2023: 80.9; 2024: 93.0; 2025: 104.6; 2026: 115.0; 2027: 125.1; 2028: 136.0; 2029: 147.9; 2030: 160.8; 2031: 174.9.
- Nominal GDP (in billion of U.S. dollars): 2023: 30.8; 2024: 34.2; 2025: 38.1; 2026: 42.8; 2027: 46.8; 2028: 51.2; 2029: 56.1; 2030: 61.5; 2031: 67.5.
- GDP per capita (in thousand of U.S. dollars): 2023: 8.2; 2024: 9.3; 2025: 10.3; 2026: 11.5; 2027: 12.6; 2028: 13.9; 2029: 15.2; 2030: 16.7; 2031: 18.3.
- CPI, period average: 2023: 2.5; 2024: 1.1; 2025: 3.9; 2026: 4.7; 2027: 3.0.
- CPI, end-of-period: 2023: 0.4; 2024: 1.9; 2025: 4.0; 2026: 2.8.
- Revenue and grants (in percent of GDP): 2023: 27.4; 2024: 27.6; 2025: 27.0; 2026: 26.6; 2027: 26.3; 2028: 26.1; 2029: 26.0; 2030: 25.9.
- Total Expenditure (in percent of GDP): 2023: 29.7; 2024: 29.9; 2025: 28.4; 2026: 28.9; 2027: 28.5; 2028: 28.2; 2029: 28.1.
- Net lending/borrowing (GFSM 2001) (in percent of GDP): 2023: -2.3; 2024: -1.5; 2025: -2.2.
- Public debt (in percent of GDP): 2023: 38.9; 2024: 35.7; 2025: 34.4; 2026: 35.1; 2027: 34.5; 2028: 34.0; 2029: 33.3; 2030: 33.0.
- Gross international reserves (in billions of US$): 2023: 6.2; 2024: 6.1; 2025: 6.8; 2026: 7.3; 2027: 8.1; 2028: 8.6; 2029: 9.0.
- In percent of IMF ARA metric: 2023: 95.2; 2024: 79.3; 2025: 104.8; 2026: 100.2; 2027: 105.4; 2028: 109.5; 2029: 115.5; 2030: 118.5.
- Current account balance (in billions of US$): 2023: -1.7; 2024: -1.8; 2025: -1.0; 2026: -2.1; 2027: -2.7; 2028: -3.1; 2029: -3.4.
- Current account balance (in percent of GDP): 2023: -5.5; 2024: -5.3; 2025: -2.6; 2026: -5.0; 2027: -4.5; 2028: -4.7; 2029: -4.8.
- Gross external debt (in percent of GDP): 2023: 69.7; 2024: 67.1; 2025: 60.7; 2026: 54.4; 2027: 50.0; 2028: 45.5; 2029: 40.9; 2030: 36.5; 2031: 32.5.
- Deposit dollarization (in percent of total): 2023: 50.7; 2024: 52.7; 2025: 47.7; 2026: 47.4; 2027: 47.2; 2028: 47.0; 2029: 46.5; 2030: 46.3.
- Credit dollarization (in percent of total): 2023: 45.2; 2024: 43.4; 2025: 42.4; 2026: 42.2; 2027: 42.0; 2028: 41.8; 2029: 41.6; 2030: 41.4; 2031: 41.2.
Georgia: Staff Concluding Statement of the 2026 Article IV Mission, April 7, 2026.
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