Tbilisi (GBC) – According to TBC Capital, Georgia’s current account balance, excluding reinvestments, will remain slightly positive in 2025. Analysts note that the seasonally adjusted current account has been in surplus for three consecutive quarters, while historically this occurred only once before, in Q3 2022.
TBC Capital highlights that the improvement in the current account is mainly driven by growth in services exports, particularly in the information and communication sector.
Additionally, slower import growth and increases in remittances and tourism revenues support the surplus. Including reinvestments, the current account deficit is projected at 2.7% of GDP in 2025, the lowest level recorded to date.
Economic growth slowed in the second half of 2025, in line with expectations of normalization around long-term trends. For 2026, the Russia-Ukraine war remains a significant factor, with both positive and negative potential impacts on Georgia’s economy. TBC Capital’s baseline scenario projects real GDP growth of approximately 4.5% for 2026.
Regarding the lari, three main factors supported appreciation in 2025: global dollar weakness, increased net foreign currency inflows, and reduced domestic demand for foreign currency, reflected in higher lari deposits and growing dollarized loans. The National Bank reportedly purchased $2.5 billion in 2025, resulting in total foreign exchange reserves of $6.2 billion and net reserves of $3.2 billion.
TBC Capital notes that the lari is still undervalued against the dollar and trade partners, supporting potential further appreciation. However, a post-war scenario could temporarily reorient currency flows, which may exert short-term pressure. Considering reserve levels and the central bank’s policy to limit excessive exchange rate fluctuations, the lari is expected to depreciate only slightly in 2026.
Inflation slowed from November, reaching 4% year-on-year in December 2025. TBC Capital projects inflation to rise at the start of 2026, then gradually slow from March, reaching 3.5% by year-end. Key risks include possible increases in electricity tariffs and food prices in the spring, which could affect the inflation trajectory.
