International rating agency Moody’s has maintained Georgia’s sovereign credit rating at Ba2 with a negative outlook, citing the country’s strong economic performance but highlighting institutional weaknesses and political risks. The agency first downgraded Georgia’s outlook in March 2025 and continues to link potential improvements to reduced political risks and stronger governance.
Moody’s notes that Georgia’s rating reflects robust economic indicators - including solid growth, declining budget deficits, and rising reserves - contrasted with domestic political tensions and institutional vulnerabilities. The agency emphasizes that structural reforms promoting economic diversification and productivity would support long-term rating improvements.
Economic overview:
- GDP growth: 7.5% in 2025, above the median for similarly rated countries (3.6%); projected to slow to 6% in 2026 and stabilize at 5% by 2027.
- Fiscal deficit: Reduced from 2.2% of GDP in 2024 to 1.2% in 2025, lowering public debt to 34.5% of GDP.
- Current account: Deficit fell to 2.9% of GDP in 2025, supported by services exports and remittances.
Moody’s stresses that the negative outlook primarily reflects institutional and political risks: post-election polarization in 2024, delayed EU accession talks until 2028, and potential weakening in governance and civil society indicators. Near-term rating upgrades are unlikely unless political risks significantly decline and institutional resilience improves. Conversely, worsening governance or escalating geopolitical and domestic political risks could threaten macroeconomic stability and trigger a downgrade.
