Georgia has made limited progress in reforming state-owned enterprises (SOEs), with the European Commission calling for stronger corporate governance and fiscal oversight of state-owned companies in its 2026 Enlargement Report.
The report states that while Georgia is moderately prepared to establish a functioning market economy and has made some progress, reforms of state-owned enterprises have advanced slowly.
The Commission recommends that Georgia continue reforming public finances and public investment management, including improving the governance and fiscal oversight of state-owned enterprises.
“Despite strong economic growth, job creation was limited and significant structural weaknesses remain,” the report notes, adding that the Commission’s recommendations from last year were only partially implemented and therefore remain mostly valid.
The report also highlights Georgia’s strong economic growth over several consecutive years, sound monetary policy and strong fiscal performance. However, it warns that the economic outlook remains subject to uncertainty, partly due to the volatile global geopolitical environment and the standstill in the EU accession process.
The Commission further points to rising wages and a recent surge in inflation as developments requiring close monitoring.
In addition to SOE reform, the European Commission has identified labour market weaknesses as a key priority. It calls on Georgia to address the low employment rate and significant regional disparities, adopt and implement a new Labour Market Strategy, and step up efforts to reduce informal employment.
The report also recommends further developing non-banking segments of the financial sector, particularly capital markets and insurance, while strengthening legislation to safeguard the independence of the National Bank of Georgia.
