The IMF has released a concluding statement at the conclusion of a staff visit to Georgia. The Georgian economy has been hit recently by some economic shocks resulting from the international situation affecting its trading partners and as a result exports are 30% down on the level one year ago and remittances from citizens working abroad are down 25%. The economy has slowed down although growth could reach 2% this year depending on the effect of the economic slowdown of trading partners.
The budget deficit needs to be kept under control. The lower growth in 2015 will lead to tax revenues falling and government revenue will therefore be lower than predicted in the budget. The IMF considers that Georgia must ensure that administrative spending is controlled. Amendments must be passed to the budget to introduce specific tax increases in addition to spending cuts, while maintaining the social safety net.
There must be an acceleration of the reforms aiming to make Georgia a better place for doing business and for investment, thereby creating jobs and increasing economic growth. Restrictions on foreign businesses should be eased, savings should be encouraged by reforms to pensions and capital markets, and the government should be looking for new private investment.
