TBILISI, DFWatch–In recent years, during regional tension and global turmoil, Georgia’s economy has shown exceptional growth, according to a new report by the International Monetary Fund (IMF).
Among the country’s robust performance indicators are high GDP growth, falling inflation, and declining public debt.
Since 2021, Georgia has sustained average annual real GDP growth exceeding 9%, fueled by post-pandemic recovery, a booming ICT and transport sector, and inflows of capital and migrants due to the war in Ukraine.
The IMF notes that inflation has returned to target levels following a two-year deviation, and public debt has declined to around 36% of GDP in 2024, down from 61% during the pandemic.
The report also highlights the role that increased transit trade and immigration play in bolstering growth, but warns that a potential end to the war in Ukraine may reduce some of these gains. The IMF sees potential that the trend will continue, citing steady internal demand, sectoral development, and political stability as important in that regard.
Growth slowed slightly from double-digit rates in 2021 and 2022 (10.5% and 10.4%, respectively) to 7% in 2023. Then, it rebounded to 9.5% in 2024. For the current year, the Fund expects a real GDP growth of 7.2%. Over the medium term, Georgia is expected to maintain an annual growth rate of around 5%, one of the highest in the region.
Inflation is projected to remain close to the 3% target, supported by tight monetary policy and a strong national currency. The current account deficit is expected to stabilize at around 5% of GDP, while foreign exchange reserves are projected to rise, driven by continued foreign investment and central bank currency purchases.
Domestic commentators view the IMF’s findings as a vindication of Georgia’s macroeconomic strategy. The country’s business community and government credit the coordinated efforts of state institutions and private enterprise for the positive trajectory, amid political tensions and external criticism.
While the IMF points to risks connected with external developments, such as the changing character or possible end to the war in Ukraine, it nonetheless suggests Georgia’s internal fundamentals are strong.
