IMF staff concludes visit to Georgia


IMF staff concludes visit to Georgia

September 15, 2022

News releases at the end of the mission include statements from IMF staff teams that provide preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily reflect the views of the IMF’s Executive Board. This mission will not result in a board discussion.

  • Despite a challenging external environment, the Georgian economy will post strong growth and buoyant tax revenues this year.
  • Given the unusually high level of uncertainty, it is important to continue prudent macroeconomic policies, maintain exchange rate flexibility and strengthen fiscal and foreign exchange buffers.
  • The successful implementation of fiscal structural reforms and continued vigilance against inflation would strengthen the resilience of the Georgian economy in the medium term.

Washington, D.C.:
An International Monetary Fund (IMF) team led by Mr James John met in Tbilisi from September 8-14, 2022 to discuss recent economic and financial developments and progress on reform priorities. At the end of the visit, Mr. John made the following statement:

“The Georgian economy will post strong growth this year despite a challenging external environment. A faster-than-expected recovery in tourism, a surge in incoming remittances and immigration-related flows have helped strengthen overseas positions and sustain domestic demand. The growth forecasts have been revised to 9 percent in 2022 as the expected negative effects of the war in Ukraine have not materialized so far. The ongoing strong recovery has strengthened the health of the banking sector. Headline inflation has started to slow, although it remains well above the National Bank of Georgia’s (NBG) target.

“Uncertainty is unusually high and there are notable downside risks, including from a deeper slowdown in key trading partners, tighter global financial conditions, a potential weakening of tourism and other external inflows, and persistently high commodity prices. This challenging environment requires maintaining prudent macroeconomic policies, in particular exchange rate flexibility and the build-up of tax and foreign exchange buffers, while ensuring that inflation expectations remain well anchored.

“Execution of the 2022 budget appears to be on track and revenue collection is higher than expected, reflecting increased growth and inflation. Saving additional revenue will strengthen fiscal cushions and help contain inflationary pressures. As work on the 2023 budget progresses, it will be important to ensure compliance with the fiscal rule, in line with the path envisaged under Georgia’s IMF-supported programme.

“The mission took stock of progress made in strengthening state corporate governance, public investment management and developing a support program for renewable electricity generation. Successful implementation of these important reforms would limit fiscal risks and strengthen the economy’s resilience in the medium term.

“NBG has taken steps to ease inflationary pressures and support financial stability. The Mission welcomes the authorities’ continued commitment to exchange rate flexibility, which has proved to be a major shock absorber in recent years. As external inflows are cheaper than expected, the NBG has built up appropriate external buffers – a key priority – by buying foreign exchange reserves via standard central bank intervention techniques. The NBG should continue to carefully assess inflation dynamics and stand ready to raise interest rates further if there are signs of inflation being broadened or becoming entrenched.

“We are grateful for the open and constructive discussions and the hospitality of the authorities during the visit. The team met with the Governor of the National Bank Gvenetadze, Minister of Finance Khutsishvili, Minister of Economy and Sustainable Development Davitashvili, Minister of Infrastructure and Regional Development Karseladze, other senior officials and representatives of the private sector and the donor community. We look forward to continuing the dialogue over the coming months as part of the first review of Georgia’s IMF-supported economic reform program.”

IMF Communications Department


Phone: +1 202 623-7100E-mail: [email protected]



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