BAKU, Azerbaijan, October 30. Georgia’s economy has shown strong growth this year, but rising inflation and global uncertainties pose challenges, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), said during an online briefing, Trend reports.
"The good performance in terms of growth this year was coupled with a pickup in inflation. Inflation is slightly above targets, but is expected to come down gradually next year," Azour noted.
He emphasized the importance of strengthening fiscal and financial buffers to preserve stability amid high global uncertainty. "Strengthening fiscal buffers and maintaining financial sector stability, strengthening the health of the financial sector, building external buffers are measures that could benefit the stability of the Georgian economy in the short term, especially that we are in an environment of high uncertainty," he said.
Azour also highlighted the need to anchor growth by accelerating reforms and enhancing Georgia’s capacity to attract investment. "It’s very important for countries in the region who have benefited from relatively good level of growth over the last few years to anchor this growth by accelerating some of the reforms, but also preserving stability," he said.
Structural reforms, according to Azour, could further strengthen Georgia’s investment appeal. "While preserving stability, the second lever of growth is to accelerate through structural reforms the capacity of the Georgian economy to attract more investment. Georgia is at several crossroads in terms of trade, logistics, and in terms of connectivity, improving business environment, reducing the cost of business, but also dealing with some of the tensions in the relationship that we saw in the past are steps that could help Georgia get its full benefit in terms of growth," he explained.
Increasing regional connectivity, reducing infrastructure and transaction costs, and developing tourism infrastructure are key areas that can boost growth. "Increasing connectivity with countries within the region, reducing the cost of infrastructure, as well as also the cost of transactions, will help Georgia keep attracting investment. Developing the infrastructure for tourism, a sector that has been growing fast over the last few years, will also provide additional growth potential for the Georgian economy," Azour added.