Georgia’s GDP grew by 7.5% in 2025, reaching 105 billion lari ($38.1 billion). The role of migrant inflows and foreign capital in driving economic growth has gradually diminished, while more advanced sectors — including information technology, finance and logistics — are emerging as key contributors to the country’s long-term economic potential.
Post-relocation boom begins to normalize
For several years, Georgia experienced unusually rapid economic growth fueled by external factors. In 2022 and 2023, the economy was significantly affected by relocation flows following Russia’s invasion of Ukraine. According to research by The Bell, about 112,000 people moved from Russia to Georgia in 2022 alone.
The influx quickly boosted demand across multiple sectors, particularly trade and real estate. By 2025, however, the effect began to fade.
Georgia’s economy remains relatively diversified, with no single sector accounting for more than 15% of gross value added. Still, several industries are now growing considerably faster than the broader economy. In 2025, the strongest gains were recorded in information technology and communications, education, finance, transportation and warehousing.
Traditional sectors lose share of GDP
Retail trade remained Georgia’s largest economic sector, although growth slowed sharply to 3.8% year over year, down from 9.3% in 2024. According to the National Bank of Georgia, the slowdown reflects moderating real income growth, which eased to 5.6% year over year in the fourth quarter of 2025, compared with 9.4% at the end of 2024.
The four largest sectors of the Georgian economy all lost share in the country’s GDP structure during 2025:
- Trade fell to 14.8% of GDP, down 0.6 percentage points (p.p.).
- Real estate declined to 9.3%, down 0.5 p.p.
- Manufacturing dropped to 9.1%, down 0.6 p.p..
- Construction decreased to 8.0%, down 0.5 p.p.
IT, finance and education drive new growth
At the same time, more sophisticated sectors expanded rapidly, supported in part by the secondary effects of skilled labor migration.
Information technology grew 28.7% year over year, education increased 24.5%, and the financial sector expanded 12.9%. Transportation and warehousing also posted strong growth of 8.9%.
Most public investment in 2025 was directed toward infrastructure projects, including:
- Road construction and upgrades: GEL 2.3 billion.
- East-West Highway construction: GEL 873 million.
- Water supply systems: GEL 882 million.
- Educational infrastructure: about GEL 1 billion.
International lenders support infrastructure spending
Large-scale infrastructure projects were financed through a combination of state and municipal budget spending and external borrowing.
In 2025, Georgia received GEL 902 million in concessional investment loans from international institutions, including the World Bank, the Asian Development Bank, the European Investment Bank and the European Bank for Reconstruction and Development, as well as from the governments of Germany and France.
Foreign investment and trade hit new highs
Foreign direct investment growth slowed slightly in 2025, rising 11.7% compared with 13% in 2024, largely because of the high comparison base from previous years.
According to preliminary data, the financial and insurance sectors attracted the largest share of FDI, receiving $607 million, or 35.9% of total inflows.
Georgia’s foreign trade turnover reached a record $25.8 billion in 2025, up 10.1% year over year. Exports rose to $7.3 billion, while imports climbed to $18.5 billion.
Passenger cars remained Georgia’s top export category at $2.8 billion, accounting for 38.6% of exports. Other major export items included:
- Precious metal ores and concentrates: $379 million.
- Spirits: $282 million.
- Wine: $268 million.
- Ferroalloys: $226 million.
CIS markets remain dominant
Most Georgian exports continued to flow to CIS countries, which accounted for 69.2% of total exports.
The largest export destinations were:
- Kyrgyzstan: 20.6%.
- Kazakhstan: 12.5%.
- Russia: 10.3%.
- EU: 12.0%.
Exports to the EU increased 52.8% in value during 2025.
Because Georgia does not manufacture vehicles domestically, many exported cars were first imported into the country. Vehicle imports totaled $3.9 billion, representing 20.9% of all imports. Georgia also imported large volumes of oil and petroleum products worth $1.4 billion, along with $680 million in pharmaceuticals.
Turkey remained Georgia’s largest source of imports with a 15% share, followed by the U.S. at 14.7% and China at 10.7%.
Inflation rises as central bank maintains tight policy
Throughout 2025, the National Bank of Georgia maintained a relatively tight monetary policy stance, keeping the refinancing rate at 8% to stabilize inflation expectations.
The real interest rate declined from 6% at the beginning of the year to 3.2% by year’s end. The central bank said maintaining the policy rate despite easing inflationary pressure was necessary to limit secondary inflation effects tied to rising prices in several consumer categories.
Annual inflation accelerated to 4% in 2025 after falling to a historic low of 1.9% in 2024. Food prices were the primary driver, rising 8.8% year over year because of external supply shocks and a low comparison base.
Georgia tightens fiscal policy amid strong economic growth
Georgia’s fiscal policy in 2024 and 2025 focused primarily on budget consolidation and strengthening fiscal discipline. The approach was partly driven by the country’s ambitions to join the European Union. At the same time, Georgia’s Ministry of Finance and Parliament used the period of strong GDP growth to reinforce macroeconomic stability.
Budget deficit falls to post-pandemic lows
At the end of 2024, Georgia’s budget deficit stood at about 2.1% of GDP, marking the country’s strongest fiscal result since the COVID-19 pandemic.
In 2025, the deficit narrowed even further. According to the International Monetary Fund, Georgia’s budget deficit fell to 1.5% of GDP, compared with the government’s initial target of 2.5%.
The improvement was largely linked to lower-than-planned capital spending.
Rising global prices remain a key risk
The main short- and medium-term risks for the Georgian economy remain rising global energy and food prices. However, the country maintains sufficient reserves, while its relatively strong fiscal position provides room for additional measures if the macroeconomic environment deteriorates.
Major international development institutions forecast that Georgia’s economic growth will slow to about 5% to 5.5% in the coming years.
