GEORGIA - ECONOMIC DEVELOPMENT

GEORGIA - ECONOMIC DEVELOPMENT

Georgia's economy has demonstrated remarkable resilience and growth in recent years, positioning the country as a regional leader in economic development. Here are the mains indices, based on World Bank data:

Economic Growth and Performance

• Robust GDP Growth: In 2024, Georgia's economy expanded by 9.4% in real terms, up from 7.8% in 2023. This growth was driven by strong domestic demand, particularly in the services sector, including IT, education, and public services.

• Inflation Dynamics: Inflation remained moderate, with the annual rate increasing to 3.5% by March 2025, influenced by rising food and healthcare costs.

Labour Market and Poverty Reduction

• Employment Improvements: Unemployment decreased from 16.4% in 2023 to 13.9% in 2024, reflecting positive labour market developments.

• Poverty Alleviation: The proportion of the population living below the poverty line at $6.85/day (2017 PPP) declined by 5.1 percentage points, reaching 35.6% in 2024, largely due to increased real wages and employment.

Trade and Investment

• Current Account Deficit: The current account deficit narrowed to 4.4% of GDP in 2024, down from 5.6% in 2023, primarily due to a surplus in services.

• Foreign Direct Investment (FDI): Net FDI inflows declined from 5.2% of GDP in 2023 to 2.7% in 2024, indicating cautious investor sentiment amid political uncertainties.

Infrastructure and Strategic Initiatives

• Transportation Projects: Georgia is enhancing its role as a transit hub through significant infrastructure projects, such as the East-West Highway and the Baku-Tbilisi-Kars Railway, facilitating trade between Asia and Europe.

• New International Airport: Plans are underway to construct a new international airport near Tbilisi, aiming to boost passenger capacity and stimulate economic growth.

Outlook for 2025 and Beyond

• Economic Forecasts: Growth is projected to moderate to around 5.5% in 2025, influenced by global economic conditions and domestic political developments.