The International Monetary Fund (IMF) has increased its projection for Georgia’s economic growth in 2026 to 6.5%, up from an earlier forecast of 5.3%.

In its concluding statement following annual consultations with Georgia, the Fund noted that the country’s economy continues to demonstrate resilience despite significant global uncertainty, including the ongoing war in the Middle East, The Caspian Post reports.

According to the IMF, Georgia’s gross domestic product (GDP) expanded by 7.5% in 2025, while economic activity remained robust during the early months of 2026.

At the same time, inflation has accelerated due to rising energy prices, reaching 5.9% in April-almost twice the National Bank of Georgia’s target level.

The IMF Executive Board endorsed the regulator’s recent decision to raise interest rates, stressing that monetary policy should remain sufficiently tight to ensure inflation returns to its target by mid-2027.

The Fund expects economic growth to gradually moderate as external shocks diminish, eventually converging toward a long-term potential growth rate of 5% by 2028.

It also emphasized improvements in Georgia’s macroeconomic indicators, noting that international reserves have reached levels considered adequate by IMF standards, while public debt has declined to below 35% of GDP.

Among its key recommendations, the IMF highlighted the importance of further accumulation of foreign exchange reserves, maintaining fiscal discipline, and advancing structural reforms aimed at job creation and improved competitiveness.

The report also pointed to ongoing structural challenges, including high youth unemployment, a shortage of skilled labor, and weak incentives for employment. To address these issues, the IMF recommended expanding vocational education programs, strengthening public employment services, and supporting higher-productivity sectors of the economy.

In addition, the Fund called for continued investment in transport infrastructure, logistics, and trade corridors, as well as further strengthening of judicial and anti-corruption institutions while maintaining a predictable and business-friendly environment.