TBILISI, June 11 – The International Monetary Fund (IMF) has raised its 2026 economic growth forecast for Georgia to 6.5%, up from a previous estimate of 5.3%, BPN reported Thursday.
The IMF said Georgia’s economy remains resilient, even as global uncertainty has increased because of the war in the Middle East. Real GDP grew by 7.5% in 2025 and remained strong in early 2026, according to the fund.
But in its revised forecast published on the fund’s website, the IMF also warned that inflation has climbed above target, driven partly by higher energy prices. Inflation reached 5.9% in April, after easing to 4.3% in March from a 5.2% peak in October 2025.
The fund said continued disruption to shipping through the Strait of Hormuz is increasing supply-side inflation pressure, and fuel prices in Georgia have already risen.
In response, the National Bank of Georgia raised its refinancing rate by 25 basis points to 8.25% on May 6. The IMF said the central bank remains committed to price stability and is ready to tighten policy further if needed.
The fund expects inflation to return to target by the middle of 2027.
The IMF also gave a positive assessment of Georgia’s fiscal and financial buffers. It said external reserves have reached the fund’s adequacy threshold, while public debt has fallen below 35% of GDP.
If prudent monetary and fiscal policies continue, public debt is expected to stay close to its current level, the IMF said.
The banking sector also remains stable, according to the report. Non-performing loans stood at 2.6% as of April 2026. The IMF said dollarization is falling after policy measures by the National Bank.
From July 1, the central bank will raise the threshold for unhedged foreign-currency loans from 750,000 lari to 1 million lari, a move the IMF said will further encourage lending in the local currency.
The IMF expects Georgia’s current account deficit to rise to 5% of GDP this year and remain around that level in the medium term, reflecting higher oil prices and lower tourism revenues.
Looking ahead, the fund said that if the war in the Middle East ends soon, Georgia’s economic growth should gradually slow toward its medium-term potential of 5% by 2028.
The IMF also said Georgia’s fiscal policy remains disciplined. The 2026 budget keeps a deficit target of 2.5%, based on conservative revenue assumptions and a planned recovery in capital spending.
