Georgia’s economy grew by 9.4 per cent in 2024, surpassing expectations and accelerating from 7.8 per cent in 2023, says the latest edition of a flagship economic report by the European Bank for Reconstruction and Development (EBRD). The ICT, education, public administration, trade, and construction sectors drove the expansion. Despite fading war-related financial inflows and lower Russian migration, domestic consumption remained strong, fuelled by credit growth and wage increases.
Meanwhile, inflation remained low in 2024, averaging 1.1 per cent, down from 2.5 per cent in 2023. It started accelerating in October 2024, driven by rising food prices, and reached 3.5 per cent year-on-year in March 2025, slightly above the National Bank of Georgia’s (NBG) target of 3 per cent. The NBG’s monetary policy stance remains cautious, balancing support for economic growth with reducing external vulnerabilities. The high real interest rate suggests a deliberate attempt to anchor inflation expectations.
Real GDP growth is projected to moderate to 6 percent in 2025 and 5 percent in 2026, close to the potential growth rate, supported by public infrastructure projects and government-backed initiatives, particularly in the transport, energy, and ICT sectors.
Meanwhile, political uncertainty and suspension of the European Union accession process could drag down export growth and investment, as the one-off effect of migration from Russia fades. Downside risks include weaker external balances and external demand, including because of increased trade tariffs and a deteriorating business environment, and slowing credit expansion.
