IMF: Georgia's Economy will Grow 4.3 % in 2020

The International Monetary Fund conducted an investigative analysis of Georgia’s economy in 2019 and expectations for 2020. The team headed by Ms. Mercedes Vera-Martin visited Tbilisi from February 5-11. After concluding the mission, both the National Bank of Georgia and the IMF issued the statements on the analyses and the projections. 

2019 growth surpassed expectations made by IMF, “highlighting the resilience of the Georgian economy.” writes Ms. Vera-Martin.

“Georgia’s growth remains strong. According to preliminary estimates, real GDP grew 5.2 percent in 2019 compared to our projected 4.6 percent, and the current account deficit declined to a record low of 4.4 percent of GDP. Import growth remained broadly flat despite robust domestic demand, while exports increased by 12 percent (y/y). Despite higher policy rates, credit growth remained sustained, partly supported by lower foreign exchange reserve requirements. Strong revenue growth brought public investment to a record high (8 percent of GDP) without increasing the fiscal deficit (2.1 percent of GDP). After reaching 7 percent (y/y) at end-2019, inflation declined to 6.4 percent (y/y) in January.” reads the statement.

Constant practical policies are needed to preserve the progression of the momentum and to bring down inflation, by the end of 2020. The statement issued by the IMF offers economic indications, on how to upkeep the anticipated economic goals. 

“The growth outlook for 2020 remains stable, at 4.3 percent, but risks are now balanced due to higher-than-envisaged economic activity in 2019. Inflation is projected to converge to the 3-percent target by end-2020 due to tightened monetary policy and as the impact of one-off effects dissipates. The uncertain global outlook calls for continued exchange rate flexibility, reserve buildup, and prudent macroeconomic policies. The team welcomes the authorities’ continued commitment to maintaining a tight monetary policy, for as long as needed, and responsible fiscal policy.”

Improving organizational reforms will make the Georgian economy more “resilient to external shocks and improve medium-term growth potential”, concludes the statement.

By B.Alexishvili

 

13 February 2020 16:41