Economic Overview

Georgia is a transition economy influenced by its past affiliation to 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. After contracting following the COVID-19 pandemic, the country’s GDP rebounded strongly, growing 10.1% in 2022 and an estimated 7% in 2023 (data GeoStat), supported by increased tourism, transit trade, and financial inflows linked to Russia’s war in Ukraine, as well as swift policy responses. According to the IMF, growth is expected to ease to 5.7% in 2024, with consumption playing a larger role supported by strong real wage growth and employment. In the medium term, growth is expected to converge to its potential rate of around 5%.

In 2023, the current account deficit remained at a historic low of 4.5% of GDP. Lower remittances from Russia were offset by an improved goods trade deficit, aided by lower import prices. Gross international reserves at the end of 2023 were USD 5 billion, covering slightly over 3 months of imports. However, the deficit is projected to widen in 2024 to 6% of GDP as remittances normalize and imports increase. Over the medium term, it is expected to converge to 5.5% of GDP as the services trade balance improves. The fiscal deficit in 2023, including budget lending, was 2.4% of GDP, surpassing the budgeted deficit of 2.8%, mainly due to higher revenues. The 2024 budget aims for a deficit of 2.5% of GDP, with increased revenues from corporate income tax for banks and new gambling taxes funding higher expenditures. These include increased wages, social benefits, and capital investments. Public debt is projected to remain below 40% of GDP both in 2024 and over the medium term. Inflation experienced a significant decline throughout 2023, ending the year at 0.4 percent. This drop was facilitated by a robust lari, reduced commodity prices, and a firm monetary policy approach. In response, the National Bank of Georgia (NBG) has gradually reduced its policy rate by a total of 275 basis points since May 2023, reaching 8.25 percent by March. However, inflation is projected to rise to 4 percent by the close of 2024, as the positive impact of last year's external factors diminishes and the tightness of monetary policy is relaxed. Over the medium term, inflation is anticipated to revert to its target level.

The Georgian unemployment rate is still high: it was estimated at 18.4% in 2023 and is expected to reach 18.6% by 2024, also due to the increased number of immigrants joining the labor market, before easing in 2025. According to the latest figures from GeoStat, 15.6% of the population was living below the absolute poverty line in 2022: Inequalities remain high compared to other economies in the region, with low levels of education and a rural population (40% of the total – World Bank). Overall, the average GDP per capita (PPP) was estimated at USD 20,172 in 2022 by the World Bank.

Foreign Trade

Georgia is very open to international trade as it accounts for around 116% of its GDP (World Bank – latest data available). The country has no foreign exchange controls, allows foreign investment in almost all sectors, and has an impressive privatization program, particularly in terms of land allocation. The main products exported in 2023 were motor cars (34.9%), copper ores and concentrates (7.9%), wine of fresh grapes (4.3%), alcoholic beverages (3.2%), and ferro-alloys (3%); whereas the main imports were motor cars (21.1%), petroleum and petroleum oils (7.5%), medicaments put up in measured doses (3.5%), petroleum gases and other gaseous hydrocarbons (2.9%), telephone sets (2.4%), and copper ores and concentrates (1.5%).

In 2023, Georgia's main customers were Azerbaijan (14.2%), Armenia (12.9%), Kazakhstan (11.5%), Kyrgyzstan (11.4%), Russia (10.8%), with the CIS countries accounting for 65.9% of total exports and the EU for 11.6%. Georgia’s main suppliers were Türkiye (16.5%), the United States (13.0%), Russia (11.2%), China (8.5%), Germany (6.3%), Azerbaijan (4.2%). The EU accounted for 24.6% of total imports, the CIS state for 21.2% (data Statistics Georgia). The country was the second former member of the Soviet Union to join the WTO and free trade agreements with Europe and China help attract foreign investors. In 2014, Georgia signed an Association Agreement (AA) and a Comprehensive Free Trade Agreement (ALECA) with the European Union, which has strengthened its exports. The Georgian government is seeking to improve its ports on the Black Sea to boost East-West trade.

Georgia has a structural trade deficit due to the low diversity and value of exports. According to WTO, in 2022, merchandise exports amounted to USD 5.5 billion (+31.5% y-o-y), whereas imports reached USD 13.5 billion (+34.1% y-o-y). At the same time, exports of commercial services more than doubled to USD 5.6 billion, while imports of services amounted to USD 2.9 billion (+63.1%). For the year as a whole, the World Bank estimated the country’s trade deficit at 9.8% of its GDP. Preliminary figures from Statistics Georgia show that in 2023, the country’s exports reached almost USD 6.09 billion, 9.1% higher vis-à-vis 2022; whereas imports reached USD 15.4 billion (+14%).

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Georgia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.