World Bank: South Caucasus Can Become a Key Energy Corridor

According to the NBG’s data for August 2025, banks have healthy capital and liquidity ratios.As of the NBG’s data, in August 2025, annual growth in loans, excluding the effect of the exchange rate, amounted to 14.8%, which the regulator largely attributes to the growth in business loans.According to the National Bank’s second-quarter data, the ratio of loans to gross domestic product remains below the long-term trend, and the ratio gap is negative.As of the analysts, the strong economic growth in the first half of 2025 slowed down the pace of closing the loan-to-GDP gap, although the loan-to-GDP ratio continues to gradually approach its long-term level. Accordingly, there is no need to change the cyclical component of the countercyclical capital buffer at the current stage. In addition, commercial banks will continue to gradually accumulate the neutral component of the countercyclical capital buffer.

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“According to the World Bank, Armenia’s economy is expected to grow by 5.2 percent this year, an upward revision of 1.2 percent. In Azerbaijan, the International Monetary Fund projects economic growth of up to 1.9 percent, while the World Bank has downgraded its forecast for the country by 0.7 percent.It is noteworthy that, in recent weeks, not only the World Bank but also the European Bank for Reconstruction and Development and the Asian Development Bank have raised Georgia’s 2025 economic growth forecast to 7 percent. Meanwhile, the International Monetary Fund projects an even higher figure of 7.2 percent for Georgia,” World Bank’s report reads.According to WB, remittance growth in the South Caucasus remains resilient as well, even as money transfers from Russia are normalizing following the surge in 2022–23.Money transfers rose by 9.2 percent year on-year during January-July in Armenia and 5 percent in Georgia, as a drop in transfers from Russia, down nearly 30 percent in Georgia’s case, was offset by higher remittances from the European Union and the United States.In the South Caucasus, growth is projected to slow to just above 3 percent, reflecting weaker expansion in Azerbaijan amid declining oil production, and a normalization of growth in Armenia and Georgia.

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According to the statement, the elections “were held in a restricted environment, in the context of months of repression against civil society, independent media, and the political opposition by self-appointed officials of the Georgian Dream party.”“Georgia's local elections of 4 October 2025 took place in a restrictive environment, in the context of a months-long crackdown on civil society, independent media and political opposition by the self-appointed Georgian Dream authorities. We deplore the fact that the authorities effectively prevented the presence of credible election observers, with a late invitation to the OSCE/ODIHR and restrictions on civil society hampering observation by domestic organisations.We are concerned by the violent clashes in the streets following the elections and call for calm from all. We urge the Georgian Dream to stop its assault on democracy and respect the fundamental rights of freedom of assembly and expression, stop the arrests of protesters and release those arbitrarily detained. We also deplore the increasingly aggressive campaign against the EU, including personal attacks on the EU and Member State ambassadors, European politicians and individual Member States.We strongly denounce the Georgian Dream's declared intention to ban opposition parties, which would mark a new culmination of Georgia's slide towards an authoritarian regime. We reiterate our call on the EU and its Member States to take immediate action and to introduce personal sanctions against key Georgian Dream political leaders and officials responsible for democratic backsliding, electoral fraud, human rights violations and the persecution of political opponents and activists, in particular Bidzina Ivanishvili and Irakli Kobakhidze”, - the statement reads.In response to recent developments in Georgia, several senior Members of the European Parliament have issued a joint statement expressing their position on the situation.The statement was authored and signed by: David McAllister, Chair of the Committee on Foreign Affairs (AFET) Mounir Satouri, Chair of the Subcommittee on Human Rights Sergey Lagodinsky, Chair of the Delegation to the Euronest Parliamentary Assembly Nils Ušakovs, Chair of the Delegation for Relations with the South Caucasus Rasa Juknevičienė, AFET Standing Rapporteur on Georgia

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According to the statement, the OSCE Office for Democratic Institutions and Human Rights (ODIHR) expresses concern over the violent protests following Georgia’s recent local elections.“Peaceful protesters in Georgia continue to be detained, sentenced, and fined for exercising their rights. The authorities have an obligation to implement their OSCE human rights commitments and international obligations, including respect for the right to peaceful assembly”, said Maria Telalian, ODIHR Director. “I would like to urge once again the Georgian authorities to ensure that civil society and human rights defenders are not targeted and that their voices are heard, as their work is crucial in fostering a vibrant democratic society.”“Recent legislation restricting the work of civil society organizations continue to hinder their rights to freedom of association, peaceful assembly, and expression. As ODIHR noted last year in a legal review, the so-called ‘’foreign agents law’’ raises serious concerns, and it should be repealed.Georgia has committed to respect and protect the right to freedom of assembly in line with its international and OSCE human rights obligations. The detention, in recent months, of peaceful protesters, human rights defenders and opposition politicians, combined with the imposition of large fines for peaceful participation in assemblies goes against international human rights standards. As a general rule, law enforcement should avoid the use of force during public assemblies and facilitate them through dialogue and communication. In all circumstances, if force is used it must always be in accordance with the law, necessary, and proportionate to the needs of the situation.ODIHR also reiterates its regret that the invitation by the Georgian authorities to observe the local elections was issued less than a month before election day, leaving insufficient time for credible and meaningful observation in line with ODIHR’s established methodology. This has deprived the country’s citizens and institutions from an impartial, transparent, and comprehensive assessment.All OSCE states have recognized the importance of civil society to democracy and committed to ensuring the space necessary for meaningful and equal political participation. In line with its mandate, ODIHR stands ready to engage with Georgia and support the country in implementing its OSCE commitments with respect to the rule of law, human rights and fundamental freedoms, including the right to freedom of peaceful assembly,” the statement reads.

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He highlighted that the completion of Georgia’s railway modernization project will significantly boost the volume of cargo passing through the corridor while reducing delivery times. “This project will enhance our throughput capacity and efficiency, which is crucial for cargo owners,” Abashidze stated.The Director General also noted that Georgian Railway is actively digitizing customs procedures and improving service quality to make logistics processes faster and more convenient.“Our goal is to make Georgian Railways services more flexible and competitive in terms of tariffs,” Abashidze added, underlining the company’s commitment to strengthening Georgia’s role as a regional transit hub.

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In detail:• The residential segment index increased by 0.4 percent compared to the previous month and increased by 8.9 percent compared to the same month of the previous year;• The non-residential segment index decreased by 1.4 percent compared to the previous month and increased by 4.0 percent compared to the same month of the previous year;• The civil segment index increased by 0.1 percent compared to the previous month and increased by 0.3 percent compared to the same month of the previous year.In August 2025 the Construction Cost Index (CCI) increased by 0.02 percent compared to the previous month. The change was mainly due to a 1.2 percent increase in the transportation, fuel and electricity cost category, which contributed 0.1 percentage points to the total index change.Compared to August 2024 the CCI increased by 4.4 percent. The latter was largely caused by the 16.1 percent increase in average monthly nominal wages of employees in the construction sector and by the 5.3 percent increase in the cost category of machinery, which contributed 3.87 and 0.34 percentage points to the total index change, respectively. Along with this, the Construction Cost Index posted a 25.0 percent increase compared to February 2022.

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The central bank has steadily increased its reserves throughout the year, adding a total of USD 1.5 billion in net purchases between January and August. The most significant growth was recorded in July, when reserves expanded by USD 416.9 million.Gold continues to play a notable role in Georgia’s reserve structure, accounting for 16.2% (USD 877.8 million) of total reserves. The NBG noted that the value of monetary gold has grown by USD 377.8 million since its acquisition, underscoring the effectiveness of the bank’s diversification strategy.Among South Caucasus countries, Azerbaijan leads with more than USD 11 billion in reserves as of August, followed by Georgia with USD 5.4 billion and Armenia with USD 4.2 billion. The NBG plans to publish updated data on international reserves on November 5, 2025.

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The greatest dissatisfaction is from the clients of consumer loans. Credit cards are also expressed (56). Mortgages (49) and installment loans (49) are represented by an equal number of complaints. However, repair loans are the most unpretentious (0).8 complaints are made against car loans and pawnshops. The share of these products in the loan portfolio of banks is insignificant.

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