Georgia’s economy appeared to take a step backward earlier this summer when the World Bank demoted the country to “lower-middle-income” status. The demotion, however, has more to do with statistical hiccups than it does with a substantial decline in economic activity.
In 2016, Georgian officials cheered when the World Bank promoted the country into the ranks of “upper-middle-income” states. It was big news in Tbilisi, the capital. But in July, officials did not have much to say when the country slipped back into the “lower-middle-income” ranks.
To understand the up-and-down tale of Georgia’s economic status, one needs to know how the World Bank classifies countries into income groups, a bit about Georgia’s 2002 and 2014 censuses, Georgia’s fluctuating exchange rate, and what country classifications are used for in practice.
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Dustin Gilbreath is a Policy Analyst at CRRC-Georgia.