Georgia: Economic and Political Overview
Georgia is a transition economy influenced by its past affiliation with the Soviet Union. Economic growth in recent years has been boosted by rising domestic and external demand, resulting in higher consumption, exports, tourism, and remittances. However, its economic openness and reliance on tourism make it vulnerable to external shocks like geopolitical tensions, global volatility, and pandemics. Georgia’s economy grew an estimated 9.5% in 2024, up from 7.5% in 2023. Growth was driven by ICT, trade, education, public administration, and construction, while the energy supply sector contracted. Despite declining war-related inflows and Russian migration, domestic consumption stayed strong, supported by rising wages and credit expansion (data EBRD). In the medium term, growth is projected to ease to 5%, aligning with its potential rate, as political uncertainty, weaker external balances, and slowing credit expansion weigh on economic activity.
On the fiscal side, tax revenues are estimated to have remained strong in 2024, reaching 25% of GDP, supported by tax hikes on gambling introduced in July. Total expenditure likely rose to 31% of GDP, driven by election-related spending. The fiscal deficit is estimated to have remained at 3% of GDP, in line with the fiscal rule. The current account deficit is estimated to have widened to around 5.5% of GDP in 2024 and 2025, due to slower exports and remittances from Russia. However, the deficit remained below the 10.3% level recorded in 2021 (data World Bank). Gross general government debt is estimated to average 38.7% in 2025-26, well below the 60% debt ceiling, with exchange rate depreciation posing a key risk to debt dynamics. Around 90% of external debt is owed to bilateral and multilateral creditors on concessional terms. Meanwhile, inflation remained low in 2024, averaging 1.1%, down from 2.5% in 2023 and well below the National Bank of Georgia’s 3% target. Risks to the outlook remain, considering that Georgia is currently in the midst of a political crisis following the disputed legitimacy of the October 2024 parliamentary elections. Tensions escalated with the unconstitutional self-convening of Parliament and the ruling party's decision to suspend preparations for EU accession negotiations. The situation deepened with the election of Mikheil Kavelashvili as president by the disputed Parliament, and his inauguration on 29 December 2024. President Salome Zourabichvili has maintained that she is still the legitimate president, despite the ongoing political turmoil. Protests against the ruling party have persisted, contributing to the continued instability in the country.
The Georgian unemployment rate is still high: it was estimated at 14.5% in 2024, down from 16.4% one year earlier and is expected to remain stable over the forecast horizon, despite the increased number of immigrants joining the labour market. According to the latest figures from GeoStat, 11.8% of the population was living below the absolute poverty line in 2023. Inequalities remain high compared to other economies in the region, with low levels of education and a rural population (40% of the total, with about a third of workers still engaged in low-productivity agriculture – World Bank). Overall, the average GDP per capita (PPP) was estimated at USD 27,363 in 2024 by the IMF.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 30.54 | 33.19 | 35.91 | 38.60 | 41.50 |
| GDP (Constant Prices, Annual % Change) | 7.5 | 7.6 | 6.0 | 5.0 | 5.0 |
| GDP per Capita (USD) | 8,173 | 8,883 | 9,613 | 10,342 | 11,129 |
| General Government Balance (in % of GDP) | 0.3 | 0.2 | 0.8 | 0.8 | 1.0 |
| General Government Gross Debt (in % of GDP) | 39.2 | 38.2 | 37.4 | 37.2 | 36.4 |
| Inflation Rate (%) | 2.5 | 1.1 | 2.6 | 3.0 | 3.0 |
| Unemployment Rate (% of the Labour Force) | 16.4 | 14.5 | 14.5 | 14.5 | 14.5 |
| Current Account (billions USD) | -1.33 | -1.93 | -2.11 | -2.23 | -2.40 |
| Current Account (in % of GDP) | -4.3 | -5.8 | -5.9 | -5.8 | -5.8 |
Source: IMF – World Economic Outlook Database, October 2021
More than 1.85 million Georgians, out of a population of 3.71 million, constitute the domestic labour force (World Bank) and the country possesses many natural resources on its territory. Georgia has forests and woods, rivers and lakes, farmland, marble, minerals, manganese, iron, copper, coal, oil, clays, and sand, as well as wildlife. The country has an agricultural tradition, which has helped develop its economy for years. However, the agricultural sector has been in decline since 1995: nowadays, agriculture accounts for 6% of the GDP and employs 39.9% of the working population (World Bank, latest data available). Around 98% of farmers are self-employed, and production is largely for self-consumption. More than 40% of Georgian territory is considered agricultural land, which also includes pastures and grasslands. The main agricultural products are cereals, technical plants, subtropical plants, fruit varieties, melons and gourds, tobacco and wine grapes, as well as rice, tea and cereals, tea and livestock. Georgia is also one of the oldest regions of wine producers and is rich in drinking water resources. The country has signed a Deep and Comprehensive Free Trade Area (CFTA) agreement with the EU, which implies that all Georgian agricultural products can be exported without duty to EU markets. In 2024, Georgia’s agricultural exports and re-exports rose 17% to USD 1.68 billion, with local exports up 19% to USD 1.38 billion, according to the Ministry of Environmental Protection and Agriculture. Food imports grew 8.8% to USD 2.2 billion, narrowing the agricultural trade deficit to USD 516 million, down 11%. As per the latest available figures by the National Statistics Office, the average annual income stands at GEL 1,932 for small holdings and GEL 20,871 for medium and large holdings.
Following a decline during the break-up of the Soviet bloc, and again between 2004 and 2008, the industrial sector in Georgia has seen signs of recovery, contributing 18.9% of the GDP and employing 13.6% of the working population, while manufacturing accounts for 8% of the GDP (World Bank). The industrial sector mainly includes food processing and the manufacture of transportation equipment, such as electric motors, iron, steel, aircraft, chemicals, and textiles. Mineral extraction concerns manganese (mainly in the Chiatura and Imeritia regions), copper, tungsten, marble and oil. Although Georgia has significant hydroelectric power generation capacity, it is heavily reliant on oil and gas imports. According to GeoStat, the total industry turnover stood at GEL 23.1 billion in 2024, 5.7% less than one year earlier, with production value also decreasing to GEL 20.1 billion (-3.8%).
Services is the most dynamic subsector of the economy, accounting for 62.1% of Georgia's GDP and employing around 46.5% of the workforce (World Bank). The sector is boosted by the hotel, restaurant, transport and telecommunications industries. The tourism sector grew rapidly until COVID-19 (9.4 million visitors in 2019 according to the Georgian National Tourism Administration) and has become one of the government's priorities with the development of coastal infrastructures in the Adjara region and Svaneti ski resorts. In 2024, the influx of international non-resident travellers to Georgia reached 7.4 million, marking a 4.2% increase compared to the preceding year's figures, but still below the pre-pandemic level. Concerning the banking sector, as of 2023, there were 15 commercial banks in operation in Georgia, with total assets worth GEL 65.58 billion (data KPMG). The two largest banks are TBC Bank Group PLC and Bank of Georgia Group PLC, which together hold around 70% of the total banking sector assets.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 39.9 | 13.6 | 46.5 |
| Value Added (in % of GDP) | 6.0 | 18.9 | 62.1 |
| Value Added (Annual % Change) | -3.4 | 5.1 | 10.9 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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