The Republic of Georgia's investment outlook for 2025 presents a blend of promising economic growth and notable risks. The Georgian economy grew +7.6% in 2024 and is expected to have GDP growth of 5.5% in 2025 and 5.1% in 2026. To put this in perspective, according to the International Monetary Fund's (IMF) January 2025 World Economic Outlook Update, global growth is projected to remain steady at 3.3% in both 2025 and 2026.
One of the hallmarks of the wealthy and successful investors is the ability to distinguish between a political crisis and an economic crisis. If a political crisis lasts too long it could well become an economic crisis and a fundamental re-rating of a country’s equities & currency will occur.
The Republic of Georgia is classified as an emerging market in terms of asset allocation and broad country risk.
Due to the controversial introduction of the so-called Russian Law, Georgian stocks & currency linked political risk was or is being re-assed by the markets and global investors.
While analyst views at times can be wrong and analysts can or may have wrong assumptions investors should recall that the analyst community and the so called “consensus view” . just because it is consensus does not necessarily make it wrong.
London listed Georgian large cap bank stocks
Uk London listed Georgian blue chips stocks have done well for private clients and in investment accounts.
TBC bank has always been a great value stock but turned into a growth stock due to its republic Of Uzbekistan franchise. TBC Uzbekistan. TBC Bank's expansion into Uzbekistan marked a significant step in its regional growth strategy and diversification efforts. Uzbekistan's large population (approximately 35 million) and low financial inclusion levels present significant growth opportunities for TBC bank Georgia and its shareholders / investors.
TBC Bank Group PLC (LSE: TBCG) has delivered a 5-year total return of approximately 244.95%, significantly outperforming the FTSE 100's 11.72% over the same period.
TBC Bank's 5-year Return on Retained Earnings (RORE) stood at 26.33% as of September 2024, indicating efficient reinvestment of earnings into profitable ventures.
Bank of Georgia Group PLC (LSE: BGEO) has delivered an impressive 5-year total return of approximately 302.90%.
Bank of Georgia Group achieved compound earnings per share (EPS) growth of 40% per year, indicating strong profitability and operational efficiency.
As of today, the analyst community has a 100% buy rating on Georgia’s TBC bank as well as on bank of Georgia group.
TBC consensus rating Buy 100% hold 0% and Sell 0%. The average analyst 12-month TP target price of 4800 or GBP48.00 implies (potential) return of + 52.9% from current levels of 3140 or GBP 31.40.
TBC 12-month dividend yield is 6.34% and next ex-dividend date is 06/12/25. TBC dividend payment frequency is semi-annual and the 1-year dividend growth rate stands at +16.16%.
Among banks and analysts who cover TBC bank stock, Peel Hunt and their analyst Robert Sage is the most bullish on the stock with a TP target price of 5000 or GBP 50. Latest rating update was 01/08/25
BGEO bank of Georgia group consensus rating Buy 100% hold 0% and Sell 0%. The average analyst 12-month TP target price of 5775 or GBP57.75 implies (potential) return of + 24.7% from current levels of 4630 or GBP 46.30.
Bank of Georgia 12-month dividend yield is 5.01% and next ex-dividend date is 07/03/25. Bank of Georgia dividend payment frequency is semi-annual and the 1-year dividend growth rate stands at a negative -13.35%.
Among banks and analysts who cover Bank of Georgia bank stock, Numis and their analyst James Hamilton is the most bullish on the stock with a TP target price of 9140 or GBP 91.40 Latest rating update was 03/28/24.
TBC bank and Bank of Georgia Group's strong financial performance and its potential as a compelling investment opportunity should merit some portfolio allocation in globally well diversified investment and retirement portfolios. Especially for family office clients and equity income investors Georgian banks are attractive on a stand-alone basis and in the global comparison.
The Georgian currency GEL Georgia Lari:
The lari GEL is trading around the 2.86 levels against the US dollar currently.
While GEL 12-month deposit rates are about +10 to +11%, the currency is expected to decline by about -5% against the US dollar this year.
Currency forecasters consensus view currently stands at 2.89 for average price of Q1 25 and 2.91 for Q2 and 2.94 for Q3 25 and 3.01 for Q4 25.
Georgia's producer prices rose 7.9% y/y in December, according to the National Statistics Office of Georgia.
Summary Georgia political crisis
The recent political crisis in Tbilisi, Georgia, has been marked by tensions between the government and opposition, often over issues of governance, democracy, and alignment with the West and the values of the European Union and the United States of America.
Georgia’s political crisis also reflects underlying ethnic and social divisions within the ex-Soviet Union country.
Throughout recent years, particularly in 2023, large-scale protests erupted in Tbilisi against the Georgian government's policies. These were largely driven by concerns that the government was drifting away from its pro-Western stance and undermining democratic values.
The ruling party’s Russian Law or "Foreign Agents" Law: sparked protests and criticism from the EU, the U.S., and human rights groups. This led to violent clashes between protesters and police, eventually forcing the government to back down and withdraw the law. Georgian assets had increased volatility during this time.
Georgia's political crisis has also been influenced by its aspirations to join the European Union and NATO. The ruling Georgian Dream party has had a mixed record on these goals, sometimes undermining efforts for greater integration with Western institutions, which has frustrated opposition leaders and Western governments.
In December 2023, Georgia was granted candidate status by the European Union (EU). However, the Georgian government's approval of legislation which requires NGOs and media organizations receiving more than 20% of their funding from abroad to register as “organizations pursuing the interests of a foreign power” and to publicly disclose their annual financial reports, led to widespread protests in the country as well as criticism from EU member states, which was followed by the European Council’s decision to halt Georgia’s EU accession process.
The United States has not imposed broad sanctions on the Republic of Georgia as a country, given its strategic importance as a partner in the Caucasus region and its aspiration to join NATO and the European Union. However, there have been some targeted sanctions on individual Georgians and entities, particularly in relation to specific events, actions, or individuals tied to Russian influence
While these targeted sanctions affect specific individuals or entities, they do not generally apply to the Republic of Georgia as a whole. The Georgian government, led by parties like Georgian Dream, continues to maintain a generally cooperative relationship with the U.S. and has supported U.S. foreign policy objectives, including sanctions on Russia.
While generally stable, the Republic Georgia faces internal political polarization and periodic protests, which may deter conservative investors. Georgia’s sovereign credit rating is BB (Stable) by Fitch Ratings and Ba2 by Moody’s, reflecting moderate risk. It is below investment grade but indicates a relatively stable economic outlook.
Proximity to Russia and unresolved issues with separatist regions (Abkhazia and South Ossetia) heighten geopolitical risks.
Georgia is often classified as a frontier market within the broader emerging market category. These are smaller, less liquid markets with higher growth potential but also higher risks.
It attracts investors seeking high returns in underdeveloped markets, particularly in sectors like infrastructure, real estate, and tourism.
Georgia Economic Growth Projections:
The Asian Development Bank (ADB) forecasts Georgia's gross domestic product (GDP) to grow by 5.5% in 2025, driven by continued gains in tourism and investment.
Similarly, Fitch Ratings projects robust growth, expecting an average of 5% during 2025-2026, supported by domestic consumption and both private and public investments.
Investment Climate:
Georgia maintains a favourable business environment, consistently ranking high in international assessments of transparency, competitiveness, and economic freedom.
The government has unveiled an $11.85 billion budget for 2025, targeting a 6% economic growth rate. This budget emphasizes infrastructure development and aims to attract foreign direct investment (FDI).
2025 Risks and Challenges:
Political Stability: Georgia’s political landscape is (still) marked by polarization and contested elections, which could impact global investor confidence. The October 2024 parliamentary elections were disputed, leading to ongoing anti-government protests.
Geopolitical Tensions: Regional conflicts and relationships with neighbouring countries pose potential risks. For instance, in December 2024, lawmakers in Georgia's separatist region of Abkhazia rejected a bill encouraging Russian investment, leading to unrest and political upheaval.
External Dependencies: Georgia's economy is vulnerable to external shocks due to its high degree of trade openness and reliance on tourism. The country is also seeking a new program with the International Monetary Fund (IMF) to bolster economic stability after the suspension of a previous arrangement.
While Georgia's economic indicators for 2025 are optimistic, underpinned by strong growth projections and a conducive investment climate, potential investors should remain cognizant of the political and geopolitical risks that could influence the economic landscape. Conducting thorough due diligence and staying informed about regional developments are prudent steps for those considering investment opportunities in Georgia.
Rainer Michael Preiss, Partner & Portfolio Strategist at Das Family Office in Singapore
