17.11.2025
Economic growth in Georgia is projected to remain strong, exceeding 7% in 2025, before easing towards its long-term potential in 2026 and 2027. Real GDP growth is forecast at 7.3% in 2025, decelerating to 5.3% in 2026 and 5.0% in 2027, still driven mainly by private and government consumption, while investment growth is expected to slow amid weaker business confidence and domestic political turmoil. Inflation is projected to pick up in 2025 but to ease thereafter, returning to the 3% target in 2027. The general government deficit is set to remain limited at around 2.1% of GDP, while the gross public debt ratio is forecast to decline towards 35% of GDP by 2027.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 7.3 | 5.3 | 5.0 |
| Inflation (%, yoy) | 3.8 | 3.2 | 3.0 |
| Unemployment (%) | 14.5 | 13.6 | 12.7 |
| General government balance (% of GDP) | -2.1 | -2.1 | -2.1 |
| Gross public debt (% of GDP) | 35.7 | 35.2 | 34.7 |
| Current account balance (% of GDP) | -4.1 | -4.2 | -4.2 |
Strong, but easing economic growth
GDP growth remained strong in 2025, though it slowed compared with 2024. Private consumption continued to be the main growth driver, while government consumption also expanded strongly as part of windfall revenues were spent. Investment remained robust despite a temporary slowdown in public investment, and merchandise exports increased markedly, albeit largely driven by re-exported cars. Looking ahead, growth is projected to ease towards its long-term potential in 2026-27. Consumption is expected to remain supported by rising wages and strong consumer lending, while investment growth is set to slow amid weaker business confidence and lower FDI inflows linked to domestic political turmoil. Merchandise exports are projected to rise only slowly due to weak export capacity, while services exports (tourism, ICT and transport) are expected to continue expanding. The current account deficit is forecast to narrow towards around 4% of GDP over the forecast horizon.
Labour market situation slightly deteriorating
The labour market showed a modest deterioration in the first half of 2025, with unemployment increasing and employment declining, particularly among self-employed workers. Given robust growth, persistent labour shortages in some sectors and ongoing reforms of employment services, this deterioration is expected to be temporary, with the labour market improving from 2026 onwards. The unemployment rate is projected to decline gradually by 2027, while remaining structurally high, and real wage growth is expected to moderate over 2026-27.
Inflation picked up temporarily, but is expected to return to target level
After falling to low levels in 2024, inflation picked up in 2025, mainly driven by higher food prices and certain services amid strong demand, while imported goods inflation remained contained due to lower fuel prices. Overall inflation is projected to average close to 4% in 2025. As these inflationary factors gradually fade, price pressures are expected to ease, with inflation returning to the 3% target level by 2027.
Limited fiscal deficit, with public debt on a downward path
The consolidated general government deficit is projected at around 2.1% of GDP in 2025 and is expected to remain at a similar level in 2026 and 2027, with no new discretionary measures assumed. Strong revenue performance and robust nominal GDP growth are expected to support a gradual decline in the general government debt ratio, which is projected to fall below 35% of GDP by 2027.
Source: European Commission. European Economic Forecast, Autumn 2025.
