The European Bank for Reconstruction and Development (EBRD) has revised Georgia’s 2025 economic growth forecast upward by one percentage point, projecting a 7% expansion. The update comes in the bank’s latest economic review, which highlights stronger-than-expected growth this year, driven largely by the booming ICT sector.
According to the EBRD, Georgia’s economic growth slowed from 9.4% in 2024 to 8.3% in the first half of 2025. The momentum was supported by credit expansion, growth in information technology and education, and robust services exports.
Inflation, which averaged just 1.1% in 2024, rose to 3.5% in January–August 2025, slightly above the National Bank of Georgia’s 3% target. The central bank’s key policy rate remains unchanged at 8%. Fiscal and external positions remain broadly stable, helped by steady tourism growth.
At the same time, the EBRD notes a decline in foreign direct investment (FDI) in 2024 and early 2025, which it attributes to investor caution. The bank also points to the suspension of Georgia’s EU accession process as a risk factor that could further dampen investment flows.
On the external side, international reserves reached USD 5.2 billion in August 2025, covering more than three months of imports.
Looking ahead, the EBRD projects Georgian growth to moderate to 5% in 2026. Positive risks include stronger external demand and sustained expansion of the services sector, while downside risks are linked to slowing global growth, stalled EU integration, and weak investor sentiment.
“Maintaining macroeconomic buffers and the credibility of economic policies will be crucial to preserving investor confidence,” the EBRD stressed.
The EBRD also updated its outlook for Georgia’s neighbors and other economies in the region:
- Armenia – 5% growth (unchanged)
- Azerbaijan – 2% growth (down 1 pp)
- Turkey – 3.1% growth (up 0.3 pp)
- Ukraine – 5% growth (down 0.8 pp)
- Russia – 1.3% growth (down 0.2 pp)
Georgia’s revised forecast aligns closely with the International Monetary Fund’s (IMF) July update, which raised its 2025 projection for Georgia to 7.2%.
