European Bank for Reconstruction and Development Increases Georgia's GDP Growth Forecast for 2025

The European Bank for Reconstruction and Development (EBRD) has published its latest economic outlook, highlighting Georgia as the leading economy in the Caucasus region, surpassing many European countries in terms of growth. In February 2025, the EBRD revised its forecast for Georgia’s GDP growth to 6%, an increase of 1.4 percentage points compared to its September 2024 projections.

The report states that economic growth in Eastern Europe and the Caucasus (EEC) slowed to 3.9% in 2024, as the impact of indirect trade, labor migration, and capital inflows weakened. The EBRD predicts that growth in the region will further slow to 3.6% in 2025 before accelerating to 4.3% in 2026.

Georgia’s Economic Performance and Growth Factors

In 2024, Georgia’s economy expanded by 9.5%, exceeding earlier forecasts and showing faster growth than in 2023, when GDP increased by 7.8%. This expansion was driven by several key sectors, including information and communication technologies (ICT), trade, education, public administration, and construction, as well as increased supply in energy, gas, and air conditioning services.

The tourism industry also set a new record, welcoming 7.4 million international visitors in 2024, contributing significantly to overall economic activity. Domestic consumption remained high due to increased lending and rising wages, further fueling economic momentum.

Inflation in 2024 averaged just 1.1%, significantly lower than the previous year’s 2.5% and well below the National Bank of Georgia’s (NBG) target of 3%. The central bank has maintained a cautious monetary policy, balancing the need for economic growth with external economic vulnerabilities.

For 2025 and 2026, Georgia’s economic expansion is expected to moderate, with GDP growth projected at 6% in 2025 and 5% in 2026. The EBRD suggests that the pace of growth will depend on regional trade integration and the country’s ability to sustain foreign investment levels.

Revised IMF Forecasts and Government Expectations

Earlier, the International Monetary Fund (IMF) also increased its GDP growth projection for Georgia to 6% in 2025, reinforcing the country’s strong economic outlook. Deputy Minister of Economy and Sustainable Development Vakhtang Tsintsadze emphasized that Georgia’s growth rate remains the highest among European nations and candidate countries for EU membership. The country’s economy is growing 2.5 times faster than the average of other EU candidate states.

Georgia’s Prime Minister Irakli Kobakhidze has described the country’s economic progress as unprecedented and expressed confidence that actual growth rates may exceed forecasts. He noted that previous IMF projections have often been outpaced by Georgia’s real economic performance. The prime minister outlined the government’s comprehensive strategy for economic development, which he believes could push GDP growth to 10% in 2025, exceeding both the EBRD and IMF estimates.

Strong Start to 2025: January GDP Growth at 11.1%

The National Statistics Office of Georgia (Geostat) reported that in January 2025, the country’s real GDP growth reached 11.1% compared to the same month in 2024. The strongest contributions came from professional, scientific, and technical services, transportation and logistics, construction, information and communications, and trade.

In addition to record-breaking tourism figures, Georgia has seen significant expansion in international air travel, with new flight routes increasing accessibility to the country. These developments are expected to further boost the country’s attractiveness to investors and travelers alike.

Beyond tourism, other major industries such as trade, construction, and the IT sector are also demonstrating strong growth. The government is actively working to foster a favorable business climate, attract foreign direct investment, and support entrepreneurship, positioning Georgia as a key player in the regional economy.