Georgia: 2025 Article IV Consultation-Press Release; and Staff Report

The 2025 Article IV Consultation for Georgia highlights the country's resilience in the face of domestic and geopolitical uncertainties, noting strong economic growth, near-target inflation, and moderate debt levels. Growth is projected to moderate to 7.2 percent in 2025 and stabilize at a potential rate of 5 percent in the medium term as domestic demand slows. Inflation is expected to remain close to the target, and public debt is anticipated to stabilize at current levels, provided that prudent monetary and fiscal policies continue. The consultation recommends a broadly neutral but flexible monetary policy to anchor inflation expectations. Fiscal policy should focus on maintaining buffers under the fiscal rule while creating space for productive investments in infrastructure and education. In order to sustain robust and inclusive growth, structural reforms are essential. These should aim to enhance agricultural productivity, improve education and training to address high structural unemployment, informality, and outward migration. Additionally, policies should encourage return migration and attract foreign talent to bolster the local labor market. Infrastructure investments are crucial for economic diversification and regional connectivity, while judicial and anticorruption reforms are necessary to boost competitiveness and the business environment.