TBILISI, May 25 (Xinhua) -- Georgia's GDP is forecast to grow between 5 percent and 5.5 percent in 2026 and 2027, with robust consumer activity and expanding services sectors as the primary drivers, local media reported Monday, citing the Spring 2026 European Economic Forecast by the European Commission (EC).
The forecast follows a 7.5-percent growth in 2025, a slowdown from 9.7 percent recorded in 2024. The EC said Georgia's economy is now converging toward its long-term potential.
Services, particularly information and communications technology, education and tourism, are expected to lead growth, supported by continued wage increases, strong consumer lending, and steady remittance inflows.
The EC flagged weakened business confidence tied to the country's domestic political situation as a key factor limiting investment growth in the near term.
The forecast also warned that ongoing global conflicts have heightened uncertainty across major markets. Fallout from the Middle East war is expected to reach Georgia mainly through higher energy costs.
As the country is entirely dependent on imported fossil fuels, rising oil and gas bills are projected to widen the current account deficit to around 4 percent of GDP in 2026, after it narrowed to 2.7 percent in 2025 due to a services trade surplus and strong remittance inflows.
The general government deficit narrowed to under 1 percent of GDP in 2025, but is expected to widen to just above 2 percent in 2026 and 2027, staying within the country's 3-percent fiscal ceiling. Public debt stood at 36.1 percent of GDP in 2025 and is projected to gradually decline to under 35 percent of GDP in 2027.
In a sign of market confidence, Georgia successfully refinanced 500 million U.S. dollars in maturing Eurobonds in January 2026 at an interest rate of 5.1 percent.
The EC noted that a potential end to the Ukraine crisis could cut into some of Georgia's economic gains, adding that Georgia would benefit from greater regional stability. ■
