Tbilisi (GBC) – The Financial Stability Committee of the National Bank of Georgia left the cyclical component of the countercyclical capital buffer unchanged at its Wednesday meeting, while deciding to gradually raise the threshold for the debt-service ratio: to 2,000 GEL starting February 1, 2027, and to 2,500 GEL starting September 1.

The National Bank of Georgia is publishing the 2026 Financial Stability Report, which provides a comprehensive assessment of the resilience of the country's financial system, as well as existing vulnerabilities and potential risks. The analysis focuses primarily on the medium- to long-term outlook, examining both the state of the financial sector and key economic trends and factors relevant to financial stability. The report evaluates vulnerabilities stemming from the external sector and provides a detailed analysis of trends and risks within the household, non-financial corporate, and real estate sectors. A significant portion is dedicated to analyzing the financial sector itself and assessing its resilience to shocks. The document also reviews the policy measures implemented by the National Bank of Georgia to foster financial stability and evaluates their impact. In this regard, particular attention is paid both to macroprudential policies aimed at mitigating risks across the financial system as a whole and to individual financial institutions.

The National Bank's Financial Stability Committee left the cyclical component of the countercyclical capital buffer unchanged. As of August 2026, the banking sector maintains healthy capital and liquidity indicators. During the same period, excluding exchange rate effects, the annual growth of the credit portfolio stood at 14.8%, driven primarily by the growth of business loans. Data from the first quarter of 2026 indicate that the loan-to-GDP ratio remains below its long-term trend; consequently, the credit gap remains negative. Against the backdrop of high economic growth recorded in the first half of the year, the negative gap in the loan-to-GDP ratio widened further. The Committee assesses that, given sustained credit activity and the gradual normalization of the economic growth rate, the loan-to-GDP ratio will eventually converge toward its long-term level. Given these trends, there is currently no indication of a need to adjust the cyclical component of the countercyclical capital buffer. At the same time, commercial banks will continue the gradual accumulation of the neutral component of the countercyclical buffer in accordance with the established schedule.

The Financial Stability Committee has decided to recalibrate the thresholds for the debt-service-to-income (PTI) ratio. The initial thresholds were based on 2017 statistical data and were previously updated in 2022 to reflect the growth of various nominal economic indicators. A need to recalibrate these thresholds has arisen once again. In recent years, alongside strong economic growth, wages and other nominal indicators have risen significantly; consequently, the existing fixed thresholds no longer accurately reflect the current distribution of borrower incomes and debt burdens. If the PTI thresholds were to remain unchanged, a borrower’s shift from one income category to another could be driven primarily by the growth of nominal income rather than by any substantial change in their actual repayment capacity or risk profile. Accordingly, the revision of the thresholds aims to align the PTI framework with the current economic environment while maintaining the original stance of the macroprudential policy. Consequently, the Committee deemed it appropriate to recalibrate this macroprudential instrument. Furthermore, to avoid a sharp, one-off impact and to distribute the effect over time, the Committee decided to raise the debt-service ratio threshold in stages. Specifically, while the 25% debt-service ratio requirement previously applied to individuals with an income of up to 1,500 GEL, this threshold will increase to 2,000 GEL starting February 1, 2027, and to 2,500 GEL starting September 1, 2027. This change helps mitigate the risk of borrower over-indebtedness and supports the resilience of the financial system. "The National Bank of Georgia continues to constantly monitor the country's financial stability and assess domestic and external risks; it will utilize all available instruments as necessary to minimize potential risks.

The next meeting of the Financial Stability Committee will be held on November 25, 2026," reads the statement released by the Committee on Wednesday.