Skip to Main Navigation


  • Country Context



    Population, million


    GDP, current US$ billion


    GDP per capita, current US$


    Life Expectancy at birth, years (2018)


    Georgia has a strong record of implementing economic reforms and raising the living standards of its citizens. Economic growth has been solid - averaging 5 percent per annum between 2005 and 2019 - and poverty (national measure) declined rapidly to 19.5 percent in 2019, almost half its 2007 rate, spurred by sound macroeconomic policies and improved governance. However, the economy has not created sufficient employment, and many Georgians remain engaged in low-productivity agricultural activities. Georgia’s export basket, which is relatively small and undiversified, underscores the country’s incomplete structural transformation. Its human capital outcomes, particularly in learning and linkages to private sector needs, are weak.

    The COVID-19 outbreak threatens to reverse Georgia’s past economic gains. Stringent measures, including curfews, a ban on public transport, lockdowns, and border closures, allowed the country to contain the pandemic’s spread in early 2020. However, the easing of measures in the summer contributed to a significant second surge later in the year, and Georgia became one of the 20 most affected countries in the world in terms of reported cases per million population. The authorities enacted a second strict lockdown from end-November to early February, leading to a reduction of COVID cases and permitting a gradual reopening of the economy starting in March 2021.

    The country has a shared consensus on national priorities, including participation in Euro-Atlantic integration, more efficient government, stronger growth, and a better functioning welfare state. This paved the way for the signing of an Association Agreement with the European Union (EU) in 2016, including a Deep and Comprehensive Free Trade Area preferential trade regime. The latest progress report, adopted by the European Parliament on September 17, 2020, confirmed Georgia’s continued progress in the implementation of the agreement. Free trade agreements with major trade partners, such as the EU and China, position Georgia well to continue to attract foreign direct investment (FDI).

    Last Updated: Apr 05, 2021

  • Strategy

    Number of Active Projects



    $951.40 Million


    $901.40 Million


    $50 Million

    The Country Partnership Framework (CPF) for FY19–22, developed in collaboration with the Government of Georgia and endorsed by the Board on May 22, 2018, aims to support sustainable and inclusive growth and improvements in living standards across three focus areas: enhancing inclusive growth and competitiveness, investing in human capital and building resilience. In response, the CPF portfolio balances interventions to strengthen infrastructure and connectivity while aiming to grow the engagement in human capital. World Bank Group support includes financing, Advisory Services and Analytics, and convening services.

    The current active lending portfolio includes 13 investment projects with a total commitment of $951.40 million, out of which $478 million is disbursed. Twenty-one percent of the commitments is in sustainable development, 47 percent in infrastructure, 19 percent in human development, and 13 percent in equitable growth, finances, and institutions. In addition, the portfolio includes two recipient-executed trust fund operations of about $6.23 million.

    In FY21, the Log-In Georgia Project ($40 million, International Bank for Reconstruction and Development [IBRD]) was approved by the Board. Three more IBRD lending operations (Georgia Relief and Recovery for MSMEs and Jobs; the Kakheti Integrated Mobility Project; and the Integrated Regional and Local Development Project), with total commitments estimated at $300 million, are envisaged for FY21 and FY22 delivery.

    The knowledge program includes 10 activities totaling $5.99 million in governance, macroeconomics, finance, innovation, energy and extractives, urban areas, the environment, and education.

    Key Engagement

    The World Bank was one of the first international development institutions to extend support to Georgia in its fight against the COVID-19 pandemic. The Bank quickly mobilized teams to prepare three new operations totaling $230 million IBRD. Approved on April 29, 2020, the Georgia Emergency COVID-19 Response Project of $80 million, processed under the Bank’s Fast-Track COVID-19 Facility, aims at mitigating the health and social impacts of the pandemic.

    Through the project, the Ministry of Health was able to procure and distribute vital medical equipment to hospitals across the country, including over 4 million polymerase chain reaction (PCR) and rapid test kits, 50 critical care and emergency ventilators, 1,000 oxygen concentrators, 400 medical beds, and many other types of supplies and equipment that are essential to the treatment of COVID-19 patients and protection of health workers. In addition, the project provides temporary monthly benefits to approximately 81,033 families, top-up benefits to about 25,379 families with more than three children, one-off benefits to 370,036 self-employed individuals, and temporary unemployment benefits to 162,425 individuals.

    The Bank is planning to provide additional financing to the COVID-19 Response Project (P173911) at an amount of $34.5 million to enable affordable and equitable access to COVID-19 vaccines, to help ensure effective vaccine deployment in Georgia through vaccination system strengthening, and to further strengthen preparedness and response activities under the parent project.

    In addition, a Supplemental Financing for the Economic Management and Competitiveness Development Policy Operation (DPO) ($50 million IBRD) provided budget support to the government amid a sharp decline in tax revenues and an unanticipated increase in expenditures to cover the anti-crisis measures.  

    Finally, the proposed Relief and Recovery for Medium, Small and Micro Enterprises Project ($100 million IBRD) will support the jobs agenda, as well as MSMEs that have been negatively impacted by the pandemic, namely in hard-hit sectors, such as tourism and agriculture.

    The COVID-19 pandemic has underlined the critical importance of digital technologies and connectivity, which is why the World Bank has rolled out the Log-In Georgia Project in support of Georgia’s National Broadband Development Strategy for 2020–25. The US$40 million project, approved by the World Bank’s Board of Executive Directors on August 28, 2020, will connect nearly 500,000 people residing in up to 1,000 villages in the mountainous and remote regions to high-speed affordable broadband internet. The project will also promote digital financial services, e-commerce, e-government services, remote learning, and telemedicine, all of which have proven to be invaluable in the wake of the COVID-19 pandemic.

    Other projects under implementation are also contributing to the COVID response. The Georgia National Innovation Ecosystem (GENIE) Project (IBRD $23.5 million) is helping develop innovative start-ups, including in the digital area, while technical assistance provided under various activities is helping deepen financial and capital markets, improve corporate governance, and strengthen investment promotion. The Georgia Innovation, Inclusion and Quality (I2Q) Project (IBRD US$102.7 million) is also financing COVID-19-related distance learning activities.

    The Bank’s support goes beyond financing through the project proceeds and includes two additional ongoing technical assistance activities: a vaccine readiness assessment (using the VIRAT/VRAF 2.0 readiness assessment tool) and preparation of GIS digital maps that visualize the COVID-19 vaccination program’s resources, population distribution, priority groups, indicators, and other data.

    The World Bank is also playing a key role in maximizing finance for development by leveraging partnerships. The International Monetary Fund Extended Fund Facility of $285 million, initially approved in April 2017, was augmented by $380 million, out of which approximately $200 million went to budget support and the remaining amount to balance of payment support to the National Bank of Georgia.

    The Asian Infrastructure Investment Bank is co-financing the Emergency COVID-19 Response Project ($100 million) and extended a parallel project aligned with the Supplemental DPO ($50 million). KfW (the German Development Bank) also extended a policy-based loan (€180 million) largely based on the DPO policy matrix.

    Last Updated: Apr 05, 2021

  • Recent Economic Developments

    The economy fell into recession in 2020, contracting by 6.2 percent. Following a strong start to the year, economic activity collapsed after March 2020 as the authorities introduced pandemic-related lockdown measures. The shock has been broad-based, but the transport, tourism, and construction sectors suffered the largest impacts. The unemployment rate reached 20.4 percent in the fourth quarter of 2020, rising sharply from an estimated 12 percent at end-2019. More than one-third of the employed were unable to work at the peak of the restrictions. Poverty is estimated to have risen by 5.4 percentage points in 2020 (using the national poverty line), even as the government’s sizable support package likely prevented an even greater increase in poverty.

    Annual inflation moderated in the second half of 2020 after peaking at 7 percent in April. A modest recovery of the lari and lower oil prices helped bring inflation down to 2.4 percent by end-2020 (this includes a 2 percentage point downward adjustment owing to a government utility subsidy).

    The economic shock has also put pressure on the external accounts. The current account deficit reached 12 percent of GDP in the first nine months of 2020, driven by weak services exports as border closings halted tourist arrivals. The deficit was partially offset by improved net income and resilient remittances from abroad, as well as a narrowing trade deficit driven by import compression. On the financing side, substantial public borrowing fully financed the gap and allowed for reserves accumulation. However, the external debt-to-GDP ratio jumped to 120 percent of GDP by end-September 2020, up from 105 percent of GDP a year earlier.

    The government’s fiscal response to the pandemic (estimated at over 7 percent of GDP) drove a widening of the fiscal deficit in 2020, with government spending up by 19 percent year-on-year. At the same time, revenue collection fell by roughly 4 percent compared to 2019. As a result, the fiscal deficit widened to 9.8 percent of GDP and public debt to over 60 percent of GDP, above the limits prescribed by the fiscal rule, thus triggering the rule’s escape clause. Support from development partners and stepped-up domestic debt issuance fully met the government’s financing needs.

    Economic Outlook 

    Georgia’s economy is projected to recover in 2021, growing by 4 percent, with the key baseline assumptions that there are no further severe waves of COVID-19 infections that necessitate additional lockdowns and that the ongoing political impasse is resolved. The recovery will continue to be supported by a fiscal stimulus in the form of accelerated capital spending, tax deferrals, accelerated value added tax refunds, and targeted support for the most affected businesses and households. The fiscal deficit is expected to remain elevated at over 7 percent of GDP in 2021.

    The external deficit is expected to narrow in 2021 compared to 2020. Still, it will remain high at about 11 percent of GDP as the services sector recovers gradually and import flows pick up in line with firming economic activity. Recovering FDI and sustained support from international financial institutions are expected to cover Georgia’s external financing needs and help maintain a comfortable reserves cushion.

    The pace of recovery beyond 2021 will be contingent upon vaccine rollout and the restoration of international trade and investment. Under a baseline scenario in which no third wave of infections materializes and a significant share of the population is vaccinated by 2022, economic growth could recover to 5.0 percent in 2022 and 2023. The baseline scenario projects that the fiscal deficit will narrow to reach the levels prescribed by the fiscal rule (3 percent of GDP) by 2023. The pandemic’s impact on poverty and inequality will depend on the severity and duration of the crisis and the policy response.

    Delayed vaccinations, further restrictions, and prolonged political tensions represent the key downside risks to this outlook. These risks could lead to a slower recovery in 2021 and a more modest recovery in the medium term, with output not returning to pre-COVID levels until 2024. A delayed recovery could also pose risks to macro-financial stability, given Georgia’s high rate of dollarization, unhedged balance sheets, and high external debt.

    Last Updated: Apr 05, 2021


Georgia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


Additional Resources

Country Office Contacts

Tbilisi, Georgia
5A, Nino Ramishvili Str., Tbilisi, Georgia 0179