Georgia is a middle-income country with a per capita GDP of 4046.8 $ (According to Geostat, 2017). Despite ongoing reforms and rapid economic growth, Georgia still faces financial challenges, including the need to tackle poverty and unemployment. It is noteworthy to say that the first years of an independent market-based economic system for Georgia were incredibly difficult. That is mainly because of the civil strife, hostilities in Abkhazia and South Ossetia, energy and transport blockades, extremely tense criminogenic environments, and the loss of old, traditional ties and suppliers. Additionally, high rates of labour migration are a small list of the negative factors that led to the unprecedented economic downturn, hyperinflation, and catastrophic rise in unemployment in the first years of independence.
Besides, the country is facing the need for radical and rapid economic reforms, the gradual implementation of which has significantly improved the situation but has not yielded the desired results, especially in terms of reducing unemployment and poverty. Despite the relatively high rate of economic growth in previous years, the situation of a large part of the population has not changed according to the latest business news. Accordingly, the goal of the Government of Georgia is creating a long-term foundation for inclusive economic growth and improving the well-being of the population.
Georgia's socio-economic development strategies are described in the document "Georgia 2020". According to these strategies, the Government of Georgia is based on three main principles, which are the following:
To promote the country's economic development, the Government of Georgia plans to activate the regulatory mechanisms of the economy, and in case of crisis will help stimulate market demand. The main principle of the country's economic development strategy is to ensure the freedom of the private sector in the conditions of optimal, efficient and transparent operation of the government. That implies the establishment of such an economic order, when the private sector itself makes decisions, the supremacy of property rights is protected, and the private sector is the main driving force of economic development. Free market relations will also be combined with optimal models of state regulations.
A stable macroeconomic policy is a necessary precondition for rapid economic growth. Between the pursuit of economic goals and the implementation of the declared policy of macroeconomic stability, preference will be given to the latter. Hence, Georgia's economic growth model is then basic, and includes the following concepts that are based on:
By developing a macroeconomic policy framework, the Government of Georgia undertakes to pursue a stable macroeconomic policy to overcome external risks, to undertake structural reforms to maintain macroeconomic stability and the reputation of a government with fiscal responsibility.