S&P Global Ratings affirms Georgia’s BB sovereign rating, upgrades outlook to positive

International rating agency S&P Global Ratings has affirmed Georgia’s sovereign credit rating at BB while upgrading the outlook from stable to positive, citing the country’s strong macroeconomic fundamentals, improved external position and credible macroeconomic policy framework.

According to the agency, the continued accumulation of international reserves by the National Bank of Georgia was one of the key factors behind the outlook upgrade. S&P said rising reserves have significantly strengthened Georgia’s external liquidity buffers and reduced the country’s vulnerability to external shocks.

The agency said the accumulation of reserves has been supported by an improvement in Georgia’s external position. The current account deficit, which exceeded 10% of GDP a decade ago, narrowed to a historic low of 2.6% of GDP in 2025. At the same time, the trend of declining financial dollarization continued, allowing the National Bank to maintain net foreign-currency purchases.

As a result, net foreign-currency purchases amounted to approximately $2.1 billion in January-June 2026, according to the report.

S&P also gave a positive assessment of Georgia’s fiscal and monetary policy frameworks, describing them as relatively sound in the regional context and saying they support the credibility of economic policy and the country’s overall economic resilience.

The agency noted that the National Bank’s moderately tight monetary policy is helping keep inflation expectations under control. In its updated forecast, S&P expects Georgia’s average annual inflation to reach 5.1% in 2026, while economic growth is projected at 6.4%.

S&P also highlighted the resilience of Georgia’s financial sector. According to the agency, the banking system remains well-capitalized, highly liquid and profitable.

The agency said the National Bank’s effective macroprudential and supervisory policies play an important role in strengthening financial stability, improving the resilience of the banking sector and further reducing financial dollarization.

S&P assessed Georgia’s banking regulatory framework as broadly aligned with international standards.