International Monetary Fund has revised Georgia’s GDP growth projection for 2018 upwards from 4.8 percent to 5.5 percent. End-of-Mission press release reads.

An International Monetary Fund (IMF) team, led by Ms. Mercedes Vera-Martin, visited Tbilisi during August 21-27, 2018 to discuss recent economic and financial developments and progress with structural reforms. At the end of the visit, Ms. Vera-Martin issued the following statement:

“Economic activity strengthened further in the first half of 2018. Growth reached 5.7 percent, supported by robust external demand, remittances, and credit. Preliminary estimates suggest a better-than-expected budget performance through June. Inflation, which stood at 2.8 percent in July, has been below the end-year target (3 percent). With inflation expected to remain subdued, the National Bank of Georgia (NBG) started to normalize monetary policy by decreasing its policy rate by 25 basis points. Meanwhile, deposit and loan dollarization continue to decline.

“Considering the stronger economic activity, the GDP growth projection for 2018 was revised upwards from 4.8 percent to 5.5 percent. The strong economic activity and weaker terms of trade are expected to widen the current account deficit. Increased downside risks to the outlook, driven by regional developments and global trade tensions, call for building up reserves and continued exchange rate flexibility, which has served the country well; and prudent macroeconomic policies to bolster resilience to external shocks.”