EBRD upgrades Georgia’s 2026 economic growth forecast to 6%, raising projection by 0.5 percentage points

The European Bank for Reconstruction and Development (EBRD) has raised its forecast for Georgia’s economic growth in 2026 by 0.5 percentage points, projecting real GDP growth of 6.0%, according to the bank’s latest Regional Economic Prospects report.

The EBRD expects average economic growth across its regions of operation to slow from 3.4% in 2025 to 3.1% in 2026 before recovering to 3.6% in 2027.

Regarding Georgia, the report noted that the country’s real GDP expanded by 7.5% in 2025, driven primarily by the services sector, while tourism remained a major engine of economic growth.

“On the demand side, private consumption was supported by strong real wage growth and robust credit expansion, while capital investment declined for the first time since 2021”, the EBRD said.

Economic growth accelerated further in the first quarter of 2026, reaching an annual rate of 9.1%, according to EBRD estimates.

“Inflation has remained above the National Bank of Georgia’s 3.0% target since March 2025, with annual inflation reaching 5.9% in April 2026. The fiscal deficit narrowed from 2.3% of GDP in 2024 to 1.4% in 2025, supported by strong growth in budget revenues and lower-than-planned capital spending. The ratio of external debt to GDP declined to 34.4% in 2025, reflecting strong nominal economic growth and a stable exchange rate”, the report said.

“The current account deficit fell from 5.3% of GDP in 2024 to a historic low of 2.6% in 2025. Gross international reserves increased to $6.5 billion in April 2026, providing coverage for approximately four months of imports”, the EBRD continued.

The report forecasts real GDP growth of 6.0% in 2026 and 5.0% in 2027. Large-scale investment projects in the real estate, transport, and renewable energy sectors could further accelerate economic growth.

However, the EBRD cautioned that the ongoing conflict in the Middle East could weaken economic activity by reducing tourism revenues and increasing the cost of imported energy resources.