Christine Lagarde, the managing director of the International Monetary Fund (IMF), has praised Georgia for its ambitious set of reforms aimed at boosting economic resilience, jobs, and living standards, but has warned that the country remains vulnerable to potential shocks, especially from escalating trade tensions and financial market volatility.
“Over the past two decades, extreme poverty levels in Georgia have declined by nearly three-quarters; life expectancy has increased by about six per cent, and real per capita income has almost tripled,” Mrs Lagarde said during a speech in the Georgian capital Tbilisi.
“More recently, Georgia has implemented bold policies to boost economic resilience. Fiscal deficits are contained; inflation is subdued, banks are well-capitalised, and the unemployment rate has reached a 15-year low. It is not surprising, therefore, to see robust economic growth forecast for this year and next. These are remarkable achievements and a testament to the resilience and creativity of the Georgian people.”
At a time of escalating trade tensions and financial market volatility, the IMF boss called on Georgia not to abandon its reform agenda.
“Policymakers can guard against these risks in a comprehensive manner,” she said, “from maintaining exchange rate flexibility, to further increasing foreign exchange reserves, to implementing prudent economic and financial policies.”
At the current, long-term GDP growth rate of 5.2 per cent, it would take more than 10 years for Georgian living standards to reach those of other emerging European nations. “This shows just how important it is to take the right policy steps,” added Mrs Lagarde. “Here we need creativity to tailor Georgia-specific policies. We need perseverance to bring the reforms to fruition.”
Mrs Lagarde also called on young Georgians to take a more active role in the country’s future.
“Your community is looking to you for leadership on some of the most pressing issues of our time: climate change means that sea levels are rising, including in the Black Sea. And there are many questions over how to manage Georgia’s water resources, air quality, and forests. On these and many other issues, you have a chance to become advocates for change. Connect with your friends and colleagues. Connect with your peers around the world to raise awareness,” she said.