The International Monetary Fund's Executive Board completed the Article IV consultation for Georgia and broadly endorsed the staff appraisal that the economy remains strong but faces renewed inflation pressure and elevated external uncertainty. Real GDP grew by 7.5 percent in 2025 and stayed strong in early 2026, while inflation rose above target to 5.9 percent in April 2026 because of higher energy prices. Directors viewed the recent policy rate increase as appropriate and called for monetary policy to remain tight and data-dependent, while preserving exchange rate flexibility and building reserves as conditions allow. The review says fiscal and external buffers have strengthened, with reserves reaching the IMF adequacy threshold and public debt falling below 35 percent of GDP. Assuming the war in the Middle East is resolved soon, growth is projected to moderate to 6.5 percent in 2026 and converge to 5 percent by 2028, with inflation returning to target by mid-2027. Directors also backed continued fiscal discipline, reforms to tax expenditures, mining taxation and tax administration, stronger state-owned enterprise governance, vigilance over rapid credit growth, foreign exchange exposures, non-bank financial activities and digital assets, and structural reforms to address youth unemployment, skills mismatches, weak work incentives and competitiveness constraints. The authorities have consented to publication of the staff report, and the next Article IV consultation with Georgia is expected on the standard 12-month cycle.
International Monetary Fund2026-06-10
International Monetary Fund completes Georgia Article IV consultation and urges tight policy as inflation rises to 5.9 percent
The IMF Executive Board concluded the Article IV consultation for Georgia, noting a strong economy but renewed inflation pressures and elevated external uncertainty, and endorsed tight, data‑dependent monetary policy with exchange rate flexibility. Directors highlighted strengthened fiscal and external buffers, projected growth moderation and inflation returning to target by mid‑2027, and called for continued fiscal discipline, tax and state‑owned enterprise reforms, and vigilance over rapid credit growth, foreign exchange exposures, non‑bank financial activities, and digital assets.