Economic Outline

Economic Indicators

Georgia is a transition economy influenced by its past affiliation with the Soviet Union. Economic growth in recent years has been boosted by rising domestic and external demand, resulting in higher consumption, exports, tourism, and remittances. However, its economic openness and reliance on tourism make it vulnerable to external shocks like geopolitical tensions, global volatility, and pandemics. Georgia’s economy grew an estimated 9.5% in 2024, up from 7.5% in 2023. Growth was driven by ICT, trade, education, public administration, and construction, while the energy supply sector contracted. Despite declining war-related inflows and Russian migration, domestic consumption stayed strong, supported by rising wages and credit expansion (data EBRD). In the medium term, growth is projected to ease to 5%, aligning with its potential rate, as political uncertainty, weaker external balances, and slowing credit expansion weigh on economic activity.

On the fiscal side, tax revenues are estimated to have remained strong in 2024, reaching 25% of GDP, supported by tax hikes on gambling introduced in July. Total expenditure likely rose to 31% of GDP, driven by election-related spending. The fiscal deficit is estimated to have remained at 3% of GDP, in line with the fiscal rule. The current account deficit is estimated to have widened to around 5.5% of GDP in 2024 and 2025, due to slower exports and remittances from Russia. However, the deficit remained below the 10.3% level recorded in 2021 (data World Bank). Gross general government debt is estimated to average 38.7% in 2025-26, well below the 60% debt ceiling, with exchange rate depreciation posing a key risk to debt dynamics. Around 90% of external debt is owed to bilateral and multilateral creditors on concessional terms. Meanwhile, inflation remained low in 2024, averaging 1.1%, down from 2.5% in 2023 and well below the National Bank of Georgia’s 3% target. Risks to the outlook remain, considering that Georgia is currently in the midst of a political crisis following the disputed legitimacy of the October 2024 parliamentary elections. Tensions escalated with the unconstitutional self-convening of Parliament and the ruling party's decision to suspend preparations for EU accession negotiations. The situation deepened with the election of Mikheil Kavelashvili as president by the disputed Parliament, and his inauguration on 29 December 2024. President Salome Zourabichvili has maintained that she is still the legitimate president, despite the ongoing political turmoil. Protests against the ruling party have persisted, contributing to the continued instability in the country.

The Georgian unemployment rate is still high: it was estimated at 14.5% in 2024, down from 16.4% one year earlier and is expected to remain stable over the forecast horizon, despite the increased number of immigrants joining the labour market. According to the latest figures from GeoStat, 11.8% of the population was living below the absolute poverty line in 2023. Inequalities remain high compared to other economies in the region, with low levels of education and a rural population (40% of the total, with about a third of workers still engaged in low-productivity agriculture – World Bank). Overall, the average GDP per capita (PPP) was estimated at USD 27,363 in 2024 by the IMF.

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