Economist Giorgi Khishtovani argues that Georgia’s reported 7.5% economic growth in 2025 does not reflect real economic strength and is largely driven by “virtual” factors. He notes that much of the growth comes from the information and technology sector, which is minimally taxed and often represents revenue generated outside the country, merely recorded on paper in Georgia. As a result, this growth has little tangible benefit for the local economy.
According to Khishtovani, the core sectors of the economy - trade, manufacturing, construction, and agriculture - are experiencing stagnation. These major industries, both in size and employment, have either shrunk or grown only marginally, weakening the country’s real economic foundation.
He adds that the sectors currently driving growth - tourism, logistics, transport, and trade - are directly linked to the ongoing war in Ukraine and to indirect trade routes involving Russia. Khishtovani warns that if the war ends and Russia normalizes relations with the West, Georgia could face a significant economic shock, since the current growth is not based on sustainable factors.
The economist also points to the deteriorating political environment as a systemic cause of economic stagnation. He says businesses have lost confidence in the political system due to ongoing political crises, weakening ties with the West, and unclear geopolitical orientation. This loss of trust, he argues, is already visible in declining investment and employment, further deepening economic challenges.
