VISA leads with credit cards, while EC/MC with debit cards

Total remittances for the first half of 2025 amounted to $1.715 billion, according to central bank data.The European Union maintained its position as the largest source of remittances, accounting for 44.4% of total flows with $140.2 million—representing a robust 17.3% annual growth rate. Within the EU bloc, Italy, Germany, and Greece emerged as the top contributors to Georgia’s remittance inflows.Transfers from the United States jumped 23% year-on-year in June, reaching $58.7 million. This contrasts sharply with flows from Russia, which declined 15.9% annually to $41.1 million, continuing a downward trend.Outbound transfers from Georgia also increased, with $34.3 million ($93.6 million lari) sent abroad in June 2025—a 21.8% rise from the $28.1 million recorded in June 2024.

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The foundations of this cooperation were laid in 2024 during the Asian Development Bank (ADB) Annual Meeting, where NBG Governor Natia Turnava met with the Governor of the Bank of Korea. During that visit, a Memorandum of Understanding was also signed between the NBG and the Korea Financial Telecommunications and Clearings Institute (KFTC), reinforcing bilateral commitment to closer cooperation.As part of this deepening partnership, the initial phase of the project will focus on launching a targeted initiative to support cashless settlements in Georgia. To mark the occasion, a delegation from the Bank of Korea and KFTC arrived in Georgia to begin the joint work.At the outset of the visit, a cooperation agreement was signed between the National Bank of Georgia and the Bank of Korea, formally confirming their partnership in the project. The document was signed on behalf of the NBG by Vice Governor Ekaterine Galdava.As Vice Governor Galdava noted, the development of cashless payments is of strategic importance for Georgia, particularly at a time when the country is actively modernizing its Real-Time Gross Settlement (RTGS) system and preparing to launch instant payment solutions. In this context, collaboration with leading central banks in the region is crucial.Importantly, Georgia is the first non-Asian country with which the Bank of Korea and KFTC have partnered on the development of cashless payment systems.The project builds on the Bank of Korea’s successful experience in payment system modernization and international best practices. Key objectives include supporting technological innovation, analyzing consumer behavior and infrastructure-related challenges, and promoting financial inclusion, particularly in regions.During the visit, the Korean delegation is expected to meet with representatives from banking and fintech associations, commercial banks, payment service providers, and fintech companies.In subsequent phases, the project will involve in-depth assessments and evaluations, based on which concrete policy, regulatory, and technological recommendations will be developed to support the future evolution of Georgia’s payments landscape.This partnership is expected to make a significant contribution to the development of Georgia’s payment infrastructure, enhance access to financial services, strengthen transparency, and promote the efficient functioning of the broader payment ecosystem.

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As of June (01.06.2025), the volume is up to 510 million GEL in total (01.06.2023- 408 million).

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At the beginning of the year, it reached 11.9%. Dollarization remains the main risk for the country. From August 1, the 750,000 limit on foreign exchange lending will come into effect and there is an expectation that the sector will go into negative gear.On the threats arising from dollarization, the Head of the Financial Stability Department of the National Bank of Georgia, Davit Utiashvili, announced about each round of raising the limit.The peak was last year, during the elections, when the National Bank also tightened the reserve ratio on funds attracted in foreign currency. In the pre-election excitement, companies and individuals, some of the accounts were transferred from GEL to foreign currency, in anticipation of a possible depreciation of the exchange rate.This accumulated more foreign currency liquidity in current accounts and there was a danger that the sector would not be able to resist the temptation and resort to foreign currency loans. This would also increase dollarization.According to the analytical tables of the National Bank of Georgia for June, which; delays the analysis by 2 months and therefore represents only 4 months of the year, the annual growth of foreign exchange loans has almost halved, to +8.8%Y.Y (4m/2024 - _16.4%Y.Y).The ratio of business loans still does not meet the criteria of the National Bank of Georgia. Dollarization is 60.26%. It was reduced by 0.01 percentage points in May. The annual change is only 0.9% (01.06.2024 - 61.15%)As of June, the banks' 37 billion business portfolio included 22.4 billion GEL in foreign currency loans (01.06.2024 - 20 billion out of 33 billion).

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The development comes amid significant changes in ownership. The Co-Investment Fund, founded by Bidzina Ivanishvili, has sold Mtkvari HPP to JSC Hydrogenius. The purchase agreement was signed on July 16, 2024, between LLC Mtkvari Holding and the buyer. However, the terms of the deal, including the sale price, payment structure, and any additional obligations, have not been made public. An "extensive agreement" was reportedly signed between the parties to prevent these details from appearing in the public registry.Mtkvari HPP has been one of the Co-Investment Fund’s largest energy projects. The fund acquired the facility in 2014, shortly after the Georgian Dream party came to power, and resumed construction, eventually investing a reported $236 million.However, the project later became entangled in legal controversy. In 2023, Bidzina Ivanishvili’s lawyer, Teimuraz Tsikvadze, revealed that the project had run $100 million over budget, raising questions about potential mismanagement or misuse of funds by fund executives, particularly Giorgi Bachiashvili, then-head of the fund.The Mtkvari HPP project was one of the key components in the criminal proceedings launched against Giorgi Bachiashvili. On February 24, 2025, Bachiashvili disclosed that he had been informed by investigators that he would be indicted the following day in relation to the Mtkvari HPP case.In a separate high-profile trial, on March 10, 2025, Bachiashvili was sentenced in absentia to 11 years in prison by the Tbilisi City Court for charges stemming from the so-called “cryptocurrency case.” He was found guilty of embezzling large sums and laundering illegal income. Bachiashvili was eventually arrested on May 27.The unfolding developments around Mtkvari HPP have brought renewed attention to the intersection of politics, investment, and legal accountability in Georgia’s energy sector.

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DemandIn May-25, total number of sold apartments in Tbilisi, according to the Public Registry data, stood at 3,325 units, of which: • Sales on the secondary market rebounded, showing 6.5% y/y increase, however, still down cumulatively in 5M25 by 6.4% y/y.• Sales on the primary market, where data are impacted by delayed registrations, increased by 2.2% y/y.G&T’s real-time survey of developers, which captures current trends on the primary market, mirrored dynamics observed on the secondary market. In May-25, primary market sales were 6.4% higher than 4M25 average sales. Cumulatively in 5M25 primary market sales remained flat y/y.In total, 15,865 transactions were registered in Tbilisi in 5M25, bringing the residential market value to US$ 1.2bn (+2.6% y/y).SupplyIn May-25, the 25 residential construction permits were issued, with total living area reaching 202,697 sq.m. (-18.3% y/y). Overall, permit issuance in 5M25 was down 1.1% y/y.PricesIn May-25, the primary market average price per square meter declined by 0.1% m/m, to US$1,331. Likewise, the average price on the secondary market (for new buildings built with permits issued after 2013) was down 0.2% m/m to US$1,253.RentsIn May-25, price for renting an average apartment (50-60 m2 ) in Tbilisi decreased by 2.0% m/m to US$ 9.3 per sq.m.

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The ratings reflect Aldagi’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management.The rating upgrades reflect AM Best’s expectation that Aldagi will demonstrate continued resilience in its balance sheet strength and maintain its risk-adjusted capitalisation comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by prudent capital and underwriting management. Furthermore, the risk of material capital extractions due to Aldagi’s association with its ultimate parent, Georgia Capital PLC, has been substantially reduced as the latter has improved its financial stability.Aldagi’s assessment also considers its liquid investment portfolio and moderate dependence on reinsurance, with counterparty credit risk reduced through its use of reinsurers high financial strength. Offsetting factors include the company’s onerous dividend policy, which limits its internal capital generation, as well as Aldagi’s exposure to the moderate political and high economic, as well as financial system risks in Georgia.Aldagi has a track record of strong operating performance and, in 2024, generated a return-on-equity ratio of 30.8% and a net-net non-life combined ratio of 91.1% (both as calculated by AM Best). Underwriting results have benefited from Aldagi’s prudent approach to risk selection and focus on profitability over top-line growth. In 2024, the company reported insurance service results of GEL 47.7 million (approximately USD 17.0 million) (2023: GEL 37.7 million, approximately USD 13.4 million). Aldagi’s net investment returns contribute positively to its operating profitability, but have been somewhat volatile over recent years owing to the high-interest rate environment in Georgia and internationally, as well as movements in the fair value of invested assets.Aldagi is one of the largest insurance companies in Georgia, with a market share of approximately 17%, based on 2024 combined non-life and life market premiums. The company benefits from its strong brand and multichannel distribution network. Nevertheless, Aldagi’s business profile is constrained by its geographical concentration and the small size of its portfolio by international standards. In 2024, the company reported insurance revenue of GEL 200.9 million (approximately USD 71.1 million). Aldagi’s top line is expected to grow moderately in the medium term as the company develops its facultative reinsurance business domestically and in regional foreign markets.

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Jozwiak shared the update on X (formerly Twitter), noting that while the Commission can issue such a warning, the final decision rests with EU member states, who must vote on the matter by qualified majority.“The EU Commission is preparing a letter to Georgia threatening with visa liberalization suspension. Ultimately, it’s 🇪🇺 member states that decide on this via a qualified majority,” he wrote.The development follows growing EU concern over Georgia’s recent political trajectory, including the adoption of the controversial "foreign influence" law and strained relations with Brussels.More details on the content and timing of the letter are expected in the coming days.

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