World Bank: Georgia’s poverty rate dropped 10.2% in 2012-2014

Five hundred thousand people in Georgia who used to live below the poverty line managed to escape the poverty and to improve their living , says the World Bank.

An assessment report titled 'Georgia: Recent Trends and Drivers of Poverty Reduction' showed the number of people living in poverty in Georgia had significantly decreased in recent years.

Specifically Georgia’s poverty rate dropped 14.4 percent in four years from 2010 to 2014. The report was published by the World Bank on August 29, 2016.

Compared to 2010 when 46.7 percent of Georgia’s population lived on less than $2.50 USD per day, this number had decreased to 32.3 percent in 2014, and trends showed this number would continue to drop according to World Bank expert forecasts.

The poverty rate dropped a considerable 10.2 percent from 2012 to 2014, while the reduction between 2010 and 2012 was 2.2 percent.

Georgia's economic growth has translated into improvements in living conditions for everyone in the country, especially for those at the bottom of income distribution,” said the World Bank report.

"In 2014 poverty decreased for the fourth consecutive year but it still affects close to one third of the country - 32 percent of the population living at less than $2.50 per day.”

This graph from the report ‘Georgia: Recent Trends and Drivers of Poverty Reduction’ shows Georgia’s poverty rate from 2006-2018. Image by World Bank Group.

The Government of Georgia lauded the report and said it proved strong action had been taken to improve the lives of Georgian citizens.

"This report proves that the Georgian Government’s economy reforms brought these results. We have seen a real drop in the poverty rate but this number is still exceptionally high,” said Georgia’s Minister of Economy Dimitry Kumsishvili.

About 1.4 million people still live on less than $2.50 a day and we have to do a lot to reduce this number further. But at the same time more than 500,000 people managed to escape poverty thanks to our efforts starting from 2012,” he underscored.

The report mentioned several areas that contributed to the reduction in the poverty rate.

The Government’s redistributive policies continue to play a significant role in lifting households out of poverty. Those with per capita spending above $5 per day line are better integrated into the services sector, especially in high-skilled jobs, than households living on per capita spending of between $2.5/day and $5/day ("vulnerable households”),”reads the report.

"Between 2010 and 2014 households’ income from economic activities played a significant role in reducing poverty. This is in contrast to the pre-2010 period when income from economic activities played a limited role and income from social transfers were more important for poverty reduction.”

The World Bank Group named several drivers of poverty reduction in its report. These were:

•  Inclusive access to economic opportunities
• A deeper look at the rural economy
• The role of the fiscal policy

Real incomes increased across rural and urban areas in 2010 to 2014 as the drivers of poverty reduction are similar both in urban and rural areas, said the World Bank.

"Income increase was driven by income from economic activities (paid work and agriculture) and social transfers. Economic activities and transfers also explained most of the poverty reduction observed between 2010 and 2014. This is in contrast to the results before 2010, when government transfers were by and large the largest driver of poverty reduction.”

Read the full version of Georgia’s poverty assessment report by the World Bank Group.