Since the release of the first Georgia Systematic Country Diagnostic (SCD) in 2018 Georgia has regained upper middle-income status and has shown resilience amid a rapidly changing external environment. Economic growth has remained robust despite shocks, driven by capital accumulation. Consistent with the slowdown in the labor contribution to growth, poverty reduction has slowed in recent years, as income from wages has decreased. Georgia has struggled to create quality jobs, and labor force participation has declined. Constraints to firm productivity and growth limit the ability of enterprises to create good jobs. Georgia has made significant strides in access to social services, but human capital formation is undermined by quality constraints, particularly in education. In terms of sustainability, Georgia has so far been unable to decouple carbon emissions from economic growth. The report discusses as well other aspects of resilience, in terms of response to shocks and overall governance. Going forward, this SCD update identifies ten policy objectives and four high level outcomes (HLOs). These HLOs are: (i) enhanced creation of good quality jobs by boosting productivity
(ii) improved and more equitable human capital
(iii) enhanced readiness to climate change and the green transition
and (iv) improved resilience to shocks.