Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Georgia is a transition economy influenced by its past affiliation to the Soviet Union. Economic growth in recent years was boosted by rising domestic and external demand, resulting in higher consumption, exports, tourism and remittances. After contracting following the COVID-19 pandemic, the country’s GDP rebounded strongly in 2021 (+10.4%) and continued its positive trend in 2022, when growth - driven by higher export, tourism revenues, and a large inflow of money transfers - was estimated at 9% by the IMF. Strong private consumption was also boosted by the surge in migrants from Ukraine. According to the IMF projections, GDP growth will moderate to 4% in 2023, due to fading support from Russian inflows and weaker external demand, returning to just above the trend rate of 5% in 2024.
General government debt, which had already shown an upward trend in recent years as a result of public infrastructure spending, expanded further in the last couple of years, as the government stepped up social and capital spending as part of a Covid-19 response package. In 2022, the government managed to reduce the deficit to 2.7% of GDP thanks to an increase in revenue prompted by enhanced taxation. For 2023 and 2024, Fitch Ratings sees a deficit below the 3% fiscal rule ceiling, at 2.6% and 2.8%, respectively. After increasing by more than half following the outbreak of the Covid-19 crisis, the debt-to-GDP ratio returned to a downward trend and stood at 39.8% in 2022, of which 75% is foreign-currency denominated, and should remain relatively stable over the forecast horizon (IMF). As in most countries, inflation stood well above the National Bank of Georgia's target of 3%, averaging 11.6% in 2022, pushed by rising energy prices and higher demand due to the immigration influx. The IMF forecasts the inflation to moderate to 6% this year before halving in 2024, although risks remain tilted to the upside. Given Georgia’s small and open economy, the lari exchange rate remains very volatile, often eroding household purchasing power.
The Georgian unemployment rate is still high: it was estimated at 18.7% in 2022 and is expected to reach 20.2% by 2024, also due to the increased number of immigrants joining the labour market. According to the latest figures from GeoStat, 17.5% of the population was living below the poverty line in 2021: Inequalities remain high compared to other economies in the region, with low levels of education and a rural population (40% of the total – World Bank). Overall, the average GDP per capita (PPP) was estimated at USD 19,789 in 2022 by the IMF.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 15.85 | 18.63 | 24.61 | 27.95 | 29.95 |
| GDP (Constant Prices, Annual % Change) | -6.8 | 10.5 | 10.1 | 4.0 | 5.0 |
| GDP per Capita (USD) | 4,263 | 4,995 | 6,671 | 7,600 | 8,172 |
| General Government Balance (in % of GDP) | -4.7 | -2.5 | -0.5 | 0.3 | 1.0 |
| General Government Gross Debt (in % of GDP) | 60.2 | 49.7 | 39.8 | 40.5 | 40.3 |
| Inflation Rate (%) | 5.2 | 9.6 | 11.9 | 5.9 | 3.2 |
| Unemployment Rate (% of the Labour Force) | 18.5 | 20.6 | 18.7 | 19.5 | 20.2 |
| Current Account (billions USD) | -1.98 | -1.94 | -0.77 | -1.15 | -1.26 |
| Current Account (in % of GDP) | -12.5 | -10.4 | -3.1 | -4.1 | -4.2 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
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