The European Bank for Reconstruction and Development has published its medium-term forecasts for Georgian economic development. According to EBRD estimates, following impressive growth in 2025, the pace of economic expansion will continue, albeit with a slight slowdown. For 2026, real GDP growth is forecast at 6.0%, and for 2027 a decline to 5.0% is expected. The bank believes that Georgia's economic recovery will continue through 2028 inclusive.
In 2025, Georgia's economy demonstrated impressive performance—real GDP grew by 7.5%. The key driver of this growth was the services sector, particularly the tourism industry. Tourism remains one of the main sources of foreign exchange earnings for the country, and in 2025, revenues from inbound tourism reached 12.3% of GDP. This demonstrates the high dependence of Georgia's economy on external demand in the tourism segment and simultaneously underscores the importance of developing this sector for the country's economic well-being.
In early 2026, economic momentum accelerated further—in the first quarter, GDP growth is estimated at 9.1% year-over-year. However, the EBRD points to an important change in the structure of this growth. For the first time since 2021, fixed capital investment declined, indicating a cooling of investment activity. Despite this, domestic consumption continued to support economic growth. Rising real wages and active lending stimulated private consumption, offsetting the decline in investment and ensuring continued economic expansion.
In the EBRD's view, major investment projects in key economic sectors can provide additional stimulus to economic activity. The bank identifies three main areas where significant investment is expected: real estate, transport, and renewable energy. The development of these sectors is considered an important condition for maintaining economic growth rates in the medium term.
Inflationary pressure in Georgia remains elevated, raising concerns among monetary policy authorities. Since March 2025, inflation has exceeded the National Bank of Georgia's target of 3%. A particularly notable increase occurred by April 2026, when inflation reached 5.9% year-over-year. This indicates the need to balance support for economic growth with control of price pressures.
Against the backdrop of economic growth, the fiscal situation has also improved. The state budget deficit decreased from 2.3% of GDP in 2024 to 1.4% of GDP in 2025 due to revenue growth and restrained capital spending. Public debt decreased to 34.4% of GDP, reflecting the positive effects of strong nominal economic growth and currency stability.
Georgia's external economic position has also strengthened. The current account deficit of the balance of payments decreased to 2.6% of GDP—the lowest level in the entire history of EBRD observations. Gross international reserves increased to $6.5 billion as of April 2026, providing approximately four months of import coverage. These figures testify to the strengthening of the country's financial resilience.
At the same time, the EBRD warns of risks that could negatively affect further economic dynamics in Georgia. Geopolitical tensions in the Middle East could adversely affect tourism flows to the region. Moreover, regional tensions could lead to increased energy import costs, which would create additional pressure on both the pace of economic growth and inflation levels in the country.