Georgia's MFA: Historic step toward lasting peace as Armenia and Azerbaijan conclude negotiations

A legal entity that opens a business account in Terabank before April 30 will be able to make foreign exchange transfers at fixed rates until November:In dollars – 5 USDIn euros/other currencies – 5 EURThe standard rate is 15 EUR USD.Companies will be able to participate in the promotion until April 30, 2025.Terabank management says that this supports small and medium-sized businesses, which is a priority for the bank with Arab capital.

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In February 2025, the number of transactions of newly-built flats in Batumi has increased by 9.4% year over year, while a 16.9% YoY decrease rate has been observed in the case of old flats.In February 2025 the weighted average price of newly-built flats in Batumi increased by 14.4% equaling USD 1,189 per sq m, while the figure for old flats recorded a 8.8% increase to USD 1,099 per sq m.In January 2025, the number of transactions of newly-built flats in Batumi has increased by 3% year over year, while a 5.7% YoY increase rate has been observed in the case of old flats.As of January 2025, the number of transactions of residential flats in Batumi has increased by 3.2% to 1,049 units. The market size has increased by 17.4% standing at USD 57 millions.

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As of February 2025 in Tbilisi the weighted average price of old flats has increased by 12.6% in the wide centre compared to February 2024, in the suburbs and city centre 6.2% and 5.9% increase was witnessed.In February 2025 the number of transactions in new projects in Tbilisi decreased by 2%. It should be noted that some transactions in new projects within the primary market are recorded later by developers, which could potentially distort the data and fail to present an accurate picture of the primary market. The declining trend in old projects has persisted - the figure for old flats features a 27.2% decrease compared to February 2024.As of February 2025 the weighted average price of newly-built flats in Tbilisi has increased by 20.4% in the wide centre compared to February 2024, 10.3% growth was observed in the suburbs, while in the city centre 7.1% increase was witnessed. The most significant price change was observed in the wide centre, which was driven by the fact that in February 2024, transactions from two large projects spanning 3-4 years were registered all at once. This caused a decrease in the weighted average price at that time. Without these projects, prices in the wide centre increased by 3.9%.In January 2025 the number of transactions in new projects in Tbilisi increased only by 0.5%. It should be noted that part of the transactions in new projects are registered later by developers. The figure for old flats features a 29.2% decrease compared to January 2024.. It is noteworthy that the declining trend in old projects has persisted for the last two years, although a decline greater than 29.2% has only been recorded since 2012 during the pandemic period.As of January 2025 in Tbilisi the weighted average price of old flats has increased by 12.5% in the wide centre compared to January 2024, in the suburbs and city centre 10.4% and 7.2% increase was witnessed.

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88% of the income - 409 million GEL (H1/2024 – 208 mln) was received by the MFO sector for retail lending. Among others, 129 million from consumer loans (H1/2024 -71.7 million), 202 million from pawnshops (H1/2024 - 93 million).As of 01.01.2025, the loan portfolio of the bank is 1.970 billion GEL and the largest number, 712,870 loans (1.1 billion) are pawnshops (H1/2024 - 1.899 billion, 712,745 loans)In total, 890,436 loans have been issued (H12/2024 - 909,177).The share of problem (bad) loans is within 2.1%. Including 2.8% in trade/service sector lending; 0.7% - in pawnshop loans; the problem ratio for agricultural loans is 4.2%.

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The largest amount, 29,000 GEL, was sanctioned to “T-N Goldia” (owners: Khatuna Chikvaidze 82%, Tamar and Nino Chiburdanidze 18%).The lender delayed submitting the financial monitoring form, for which it was fined with 5,000 GEL. The supervisor submitted incorrect documentation for 2 clients and issued 2,000 GEL each.In addition, the lender’s software system works with flaws. It is difficult to identify suspicious users. The program was unable to detect/block all sanctioned ones, for which it was also fined 15,000 GEL.Added to this was 5,000 GEL for ignoring AML requirements in relation to 4 clients.3 MFOs were sanctioned for failure to comply with obligations under AML/CFT legislation,  including “Giro Credit” (owner Giorgi Gugumberidze). MFO “Moneta Express” (owners: Zviad Gubeladze 50%, Giorgi and Zurab Akhvlediani 50%), for concealing information on 5 transactions subject to monitoring. “Micro Fin” (Supervisory Board of JSC: Tamar and Levan Lebanidze) was fined with 6,000 GEL.

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This year’s Forum brought together the Governors and Vice Governors of the central banks of EU Member States and candidate countries, focusing on Europe’s investment priorities and the identification of best practices and effective strategies to meet investment needs.The Forum aimed to support the mobilization of resources necessary to strengthen the European Single Market and prevent potential economic fragmentation. As part of the EIB Group Forum, MEPs, representatives of central banks from various countries, and stakeholders from the business and financial sectors discussed key topics, including mechanisms for decarbonizing industry, the development of artificial intelligence, capital market integration, security, and innovation promotion.During the panel discussion, experts from diverse fields also explored global economic challenges and exchanged insights on effective strategies for attracting investment.“In an era of rapid technological change and globalization, the National Bank of Georgia spares no effort in developing an open finance ecosystem and introducing new services to enhance consumer access to a wide range of financial products. It is also worth noting that, within the scope of our mandate, the NBG remains committed to reducing barriers for new market players and advancing modern financial infrastructure through initiatives such as open banking, the regulatory sandbox, and other projects. These efforts contribute to fostering a sustainable and secure investment environment,” noted Nino Jeladze. 

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The value of export increased by 4.0 percent reaching USD 835.4 million, while the import increased by 19.5 percent and amounted to USD 2 728.6 million.The trade deficit equaled USD 1 893.3 million and its share in trade turnover constituted 53.1 percent.

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According to the EU Delegation, the findings were derived from responses by up to 200 European companies operating in Georgia and it shows that businesses are facing challenges that could hinder long-term economic stability.“Georgia’s Business Landscape: Economic Growth Faces Political, Workforce and Structural Barriers Despite continued economic growth in 2023 and early 2024, businesses in Georgia are facing number of challenges, primarily driven by political uncertainty and workforce shortages, according to the newly released EU Business Climate Report Georgia 2024. The survey, conducted among up to 200 companies with European links, highlights concerns that could hinder long-term economic stability.Key Challenges Facing Businesses in GeorgiaThe report underscores three critical obstacles affecting businesses: Political Instability: The stalled EU accession process since June 2024, coupled with upcoming parliamentary elections, has impacted business environment –76.7 % of companies cite instability as a major concern Workforce Deficit & Skills Gap: Nearly half of surveyed companies report skills shortages leading to 5-40% underperformance, with an estimated annual GDP loss of 26%. Exchange Rate Fluctuations: Currency instability continues to challenge businesses in financial planning and investment decisions. Additionally, concerns over corruption and regulatory inefficiencies have been raised by businesses, particularly in relation to tax policies, public procurement, and the judicial system, further complicating the investment climate.One of the most important findings is the severe shortage of skilled labor, which has led to an annual income loss of 55.6 billion GEL across businesses. High emigration and mismatched education programs further worsen this issue. Despite its cost, investing in internal workforce training has shown a positive return for businesses proving that workforce development is a key driver of resilience.Impact of Workforce Shortage: GDP loss: -26% annually Value added shortfall: -21.2B GEL Unrealized business income: -55.6B GEL Meanwhile, while the EU remains Georgia’s largest trade partner, exports to the EU fell by 18% in 2023(Geostat figures), primarily due to: High compliance costs for EU standards Lack of accredited laboratories for European certification Limited understanding of regulatory frameworks among businesses Additionally, SMEs, despite showing growth, still struggle with low economic contribution, and their access to EU markets remains challenging.The report calls for accelerated judicial and education reforms to enhance business confidence. Education institutions must work closely with the private sector to align skills development programs with market needs. Meanwhile, improving economic policies and trade infrastructure will be crucial to sustaining Georgia’s EU market integration efforts.In conclusion, the findings of the EU Business Climate Report Georgia 2024 paint a complex picture. While economic growth continues, it is overshadowed by political uncertainties, workforce shortages, and trade barriers. To maintain momentum, Georgia must address these structural issues—particularly workforce development—to secure long-term stability and EU market access,” notes the information by the European Union Delegation to Georgia.

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