Moody’s forecasts 6% GDP growth for Georgia in 2026 following periodic review

International credit rating agency Moody's Ratings has completed its periodic review of Georgia’s sovereign credit profile and related issuer ratings, highlighting a stronger economic outlook and resilient fundamentals.

According to the latest assessment, Georgia’s economy is expected to grow by 6% in 2026, an upward revision from the agency’s previous forecast of 5.5% growth.

Moody’s stated that Georgia’s long-term issuer rating of Ba2 reflects the country’s solid economic and fiscal foundations, which remain resilient despite ongoing geopolitical tensions.

The agency noted that real GDP growth averaged 7.5% in 2025, significantly outperforming the 3.6% median of peer countries. This expansion was driven by robust domestic demand, rising wages, strong performance in the services sector, and increased infrastructure spending.

However, Moody’s highlighted ongoing structural challenges, including unfavourable demographics and low agricultural productivity. Growth is expected to moderate to around 6% in 2026, gradually converging toward a potential rate of about 5% as domestic demand normalizes.

Fiscal performance improved in 2025, with the budget deficit narrowing to 1.2% of GDP from 2.2% the previous year, supported by tax reforms. This helped stabilize public debt at 34.5% of GDP.

In the external sector, strong export growth was accompanied by rising imports. Despite a slight widening of the trade deficit, the current account deficit narrowed significantly to an estimated 2.9% of GDP, down from 5.3% in 2024, supported by increased remittances and services exports. Moody’s expects the deficit to remain near this level over the next two years, well below the 8% average of the past five years.

Foreign exchange reserves (excluding gold) are projected to increase to $5.6 billion in 2026 and $6.1 billion in 2027, up from $4.7 billion in 2025, supported by strong foreign direct investment inflows. The government also successfully refinanced its Eurobond obligations in January 2026 by issuing $500 million in bonds with a 5.1% coupon rate.

The report also emphasises the positive impact of transit trade through the Middle Corridor on Georgia’s external sector.

Moody’s stated that Georgia’s credit profile is supported by strong economic performance (rated “baa2”), solid institutional and governance frameworks (“baa3”), and relatively low public debt with a favorable structure (“a3”).

Moody’s noted that the outlook could improve to stable if political risks decline significantly and institutional quality strengthens. Structural reforms aimed at economic diversification and productivity growth could also positively impact the rating.

The agency clarified that this publication does not constitute a rating change and does not signal any imminent adjustment. The latest updates on ratings and history are available on Moody’s official website.