Georgia’s economic activity performed better than expected, concludes the International Monetary Fund mission, which visited Georgia last week to discuss recent economic and financial developments and progress in structural reforms.
At the conclusion of the visit, IMF mission director to Georgia Mercedes Vera-Martin, who led the mission, issued the following statement:
Economic developments in 2017 were positive. Growth reached 4.8 percent driven by consumption and external demand. Rapid growth in exports, tourism, and remittances supported economic activity and narrowed the current account deficit to 7 percent of GDP through 2017Q3,” stated Vera-Martin.
Inflation in 2017 was above the target due to higher excise rates on fuel and tobacco, and reached 6.7 percent by end-of-year. In response to a pickup in inflation expectations towards the end of the year, the National Bank of Georgia increased the policy rate by 25 basis points, to 7¼ percent, in mid-December. As expected, annual inflation declined to 4.3 percent in January 2018,” she added.
The IMF mission discussed with Georgian authorities progress towards implementing structural reforms to support higher, sustainable, and more inclusive growth.
As the IMF mission, stated the authorities in Georgia have taken steps to strengthen revenue administration, support capital market development, improve financial safety nets, and have submitted to Parliament draft laws on public-private partnership and pension reforms.
The recent rebound in growth offers an opportunity to advance these reforms, with a view to mobilise domestic savings, increase private investment, and diversify the economy. These reforms are needed to boost medium-term growth, create jobs, and improve living standards,” stated Vera-Martin.
