Industrial output and commodity exports are growing strongly, but their contribution to Georgia’s real economic growth remains relatively modest, according to TBC Group Chief Economist Nikoloz Zurabashvili. TBC Capital data shows that industry accounted for around 41% of the increase in total economic output in the first quarter, while its contribution to real economic growth was only 3.4%.
Zurabashvili said the difference is largely explained by the role of intermediate consumption and price effects. Gross output includes intermediate goods and services used in production, while GDP measures value added after intermediate consumption is excluded. In addition, part of the increase in commodity output reflects higher prices rather than higher real production.
He noted that commodity prices, particularly oil prices, have risen significantly amid the conflict in the Middle East. Oil has also become Georgia’s leading export product since late 2025. However, because economic growth excludes both intermediate consumption and price effects, the rapid increase in commodity exports and business-sector output does not translate into a similarly large contribution to real GDP growth.
According to Zurabashvili, IT was the main driver of economic growth in the first quarter, significantly ahead of other sectors. He expects a similar pattern in the second quarter, with commodity exports continuing to generate substantial foreign-currency inflows but making only a limited contribution to real economic growth. Second-quarter sectoral data is expected at the end of September.
