Bank of Georgia Is Lending The Auto Industry

According to the Ministry of Agriculture, this represents a 36% increase in export value compared to the same period last year, or an additional USD 6.6 million. The average export price per kilogram rose by 39%, reaching USD 8.46.The European Union remains Georgia’s primary export market, with Italy receiving the largest volume at 1,000 tonnes. Other key EU partners include Germany (302.1 tonnes), Spain (197.0 tonnes), and the Czech Republic (119.4 tonnes).Beyond the EU, Georgian hazelnuts were also exported to Armenia (119.7 tonnes), Russia (117.5 tonnes), Turkiye (111.2 tonnes), and various other markets.

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Key Macroeconomic Assumptions Real economic growth: 5.0% (medium-term forecast: 5.3%) Nominal GDP: 110.5 billion GEL, with per capita GDP exceeding $10,900 Budget revenues: 26.8 billion GEL (24.2% of GDP) Budget deficit: 2.5% of GDP Government debt: 35% of GDP By 2029, nominal GDP is expected to reach 140.9 billion GEL, exceeding $13,900 per capita.Social Spending PrioritiesSocial programs account for 7.0 billion GEL of the budget, with notable allocations including: Pensions: Pensioners aged 70+ will receive 495 GEL (594 GEL in mountainous settlements) Pensioners under 70 will receive 370 GEL (444 GEL in mountainous settlements) Disability benefits: increase of 45 GEL for those under 18, and 20 GEL for other categories Healthcare: 2.1 billion GEL, including a 10% salary increase for primary healthcare personnel Housing for displaced persons: 240 million GEL Education, Culture, and Sports Education and science: 3.4 billion GEL 1.7 billion GEL for public school financing 500+ million GEL for construction and rehabilitation of schools 110 million GEL for kindergartens Culture and sports: 1.05 billion GEL, with 615 million GEL funded through the state budget Defense and Security Ministry of Defense, Ministry of Internal Affairs, and security services: 3.5 billion GEL Includes a 10% salary increase for police officers and soldiers Defense infrastructure development: 445 million GEL Infrastructure and Development Total infrastructure funding: 7.6 billion GEL, including: 1.2 billion GEL for roads and expressways (681 million GEL for expressway construction) 2.6 billion GEL for municipal infrastructure 570+ million GEL for water supply and sewage systems 820 million GEL for educational infrastructure 150 million GEL for tourism infrastructure 200 million GEL for sports infrastructure Other Allocations Small and medium-sized business promotion: 270 million GEL Agriculture programs: 660 million GEL Environmental protection: 210 million GEL Public servant salaries: 10% increase in budgetary organization remuneration The budget will now be discussed in Parliament, where proposals and feedback will be incorporated, with final approval expected in December 2025.

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The increase was observed in the production value of the business sector as well. In 2024, production value equaled 90.5 billion GEL, which is 16.3 percent more year-on-year.In the 2024, large businesses generated 67.7 percent of total turnover, while medium-sized businesses generated 15.8 percent, and 16.5 percent was generated by small businesses. A distribution was slightly different in case of total production value: 46.8 percent was on large businesses, 25.5% - on medium, and 27.7% - on small businesses.In 2024, total purchases of goods and services carried out by enterprises equaled 114.9 billion GEL (year-on-year 5.4 percent more), while the purchase of goods and services for resale amounted to 71.4 billion GEL (year-on-year 0.2 percent more).In the 2024, the average number of persons employed in business sector equaled 866.2 thousand, which is year-on-year 5.2 percent more. Out of the total number of persons employed, 43.2% were female and 56.8% were male.Large businesses employed 39.4% of total number of persons, while 20.3% were employed by medium, and 40.3% - by small businesses. The total number of employees amounted to 801.6 thousand (year-on-year 3.9% more).The total personnel costs of enterprises equaled 19.9 billion GEL (year-on-year 15.3 percent more).In the 2024, average monthly remuneration of employed persons equaled 2 024.4 GEL (197.2 GEL increase year-on-year) while remuneration of employed women specifically was 1 601.4 GEL(156.2 GEL increase year-on-year). Average monthly remuneration of employed persons by size of enterprises is as follows: Large business - 2 297.4 GEL Medium business - 2 443.8 GEL Small business - 1 437.5 GEL In the 2024, the trade sector (including repair of motor vehicles and motorcycles) has the highest share (34.4 percent) in the total turnover in the business sector, followed by arts, entertainmentand recreation with 33.5 percent share, manufacturing - with 7.9 percent, construction - with 6.6 percent, transportation and storage - with 4.6 percent, and other sectors - with 12.9 percent share.In the 2024, trade (wholesale and retail trade, repair of motor vehicles and motorcycles), manufacturing, and human health and social work activities led business sector by number of employees (accordingly with 29.0 percent, 11.3 percent and 9.3 percent share). However, enterprises engaged in transportation and storage (8.6 percent), construction activities (8.0 percent), information and communication (5.9 percent), and accommodation and food service activities (5.3 percent) had also a significant share.

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Turnover increased about 4.1 times in manufacturing and about 2.0 times in healthcare and social work activities. Turnover also increased in the professional, scientific and technical activities (78.8 percent), financial and insurance activities (74.5 percent), administrative and support service activities (31.6 percent), information and communication (22.3 percent), other services (15.0 percent), accommodation and food service activities (9.3 percent), and transportation and storage(0.8 percent) sectors.The production value (of goods and services) of non-profit institutions amounted to 2 720.6 million GEL, 15.9 percent higher compared to the previous year.The biggest shares in production value was generated by organizations in following sectors: other services (25.4 percent), arts, entertainment and recreation (22.1 percent), healthcare and social work (16.5 percent), education (14.6 percent), professional, scientific and technical activities (6.4 percent), and water supply, sewerage, waste management and remediation activities (5.3 percent). 62.5 thousand people (51.9 percent women and 48.1 percent men) were employed in nonprofit organizations in 2024. Compared to 2023, this figure has increased by 4.2 percent.Education sector held the biggest share (24.8 percent) in employment, followed by the similar share of arts, entertainment and recreation (24.8 percent), then followed water supply, sewerage, waste management and remediation activities (13.9 percent), healthcare and social work (12.7 percent), while other sectors held the rest of 23.8 percent.Out of all employed, 62.1 thousand were hired, which is 4.1 percent more compared to 2023.

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Balance of goods remains the main driver of the current account balance. Trade of goods deficit decreased by 10.9 percent annually and amounted to 1.6 billion USD (4.4 billion GEL) in the second quarter. Among them exports increased by 21.1 percent and imports - by 5.9 percent annually.Income from the export of services continued to increase, rising by 7.8 percent in the second quarter of 2025 compared to the same period of the previous year. The travel export reached 1.1 billion USD (3.1 billion GEL) in the second quarter of 2025, up by 5.0 percent annually. Notably, income from the export of computer and information services are also on the rise. In the second quarter of 2025, these income reached USD 222.6 million, accounting for 2.4 percent of GDP. Meanwhile, income from the export of transportation services remain at a high level, amounting to USD 440.9 million in the second quarter of 2025, which represents 4.8 percent of GDP.Net income account totaled -578.6 million USD (-1.6 billion GEL) in the second quarter of 2025. Compensation of employees, the positive component of income account increased by 1.1 percent, while net investment income the negative component decreased by 4.9 percent year-on-year.The current transfers account remained positive. However credit of current transfers increased by 2.3 percent annually, totaling 902.2 million USD (2.5 billion GEL). The private sectors net transfers was up by 4.0 percent amounting to 857.1 million USD (2.3 billion GEL).Net foreign direct investments amounted to 506.3 million USD (1.4 billion GEL) accounting for 5.5 percent of GDP in the reporting period.

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International assets totaled 18.1 billion USD (49.3 billion GEL) as of June 30 2025, increased by 888.1 million USD compared to the previous quarter.Liabilities increased by 2.3 billion USD during the quarter reaching 51.1 billion USD (139.2 billion GEL).

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Public sector external debt amounted to 11.5 billion USD (31.2 billion GEL) or 32.4 percent of GDP, out of which, debt of the general government sector amounted to 8.9 billion USD (24.3 billion GEL) or 25.3 percent of GDP. External liabilities of the National Bank of Georgia amounted to 821.1 million USD (2.2 billion GEL) or 2.3 percent of GDP, and the bonds and loans of public enterprises were correspondingly 451.8 million USD (1.2 billion GEL) or 1.3 percent of GDP and 1.3 billion USD (3.4 billion GEL) and 3.6 percent of GDP.Banking sector external debt amounted to 9.1 billion USD (24.8 billion GEL) or 25.8 percent of GDP; Other sectors’ external debt stood at 4.9 billion USD (13.4 billion GEL) or 14.0 percent of GDP; While 2.7 billion USD (7.4 billion GEL) or 7.7 percent of GDP was the intercompany lending. 87.0 percent of the gross external debt of Georgia was denominated in a foreign currency.The net external debt of Georgia amounted to 13.8 billion USD (37.5 billion GEL) or 39.0 percent of the last four quarters’ GDP. Net public sector external debt was 6.8 billion USD (18.4 billion GEL) or 19.2 percent of GDP.External liabilities of the National Bank of Georgia decreased by 1.7 million USD. Out of that, transactions led to debt’s decrease by 29.3 million USD and exchange rate changes increased the debt by 27.7 million USD. By the end of the second quarter of 2025, the external debt of the National Bank of Georgia amounted to 821.1 million USD, of which 477.2 million USD are Special Drawing Rights (SDR)1, which have no maturity date, therefore there is no obligation to repay them as long as Georgia is a member of the IMF.

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The Asian Development Outlook (ADO) September 2025, ADB’s flagship annual economic publication, forecasts Georgia's gross domestic product (GDP) to grow by 7.0% in 2025 compared to April’s forecast of 6.0%, while it remains 5.0% in 2026. Growth is being driven by strong performance in services and information and communication sectors, reflecting robust productivity gains in information technology, alongside resilient private consumption and a two-fold increase in reinvested profits by foreign investors.“Georgia’s steady economic growth amid global risks and uncertainties is an indication of a positive outlook for the future,” said ADB Country Director for Georgia Lesley Bearman Lahm. “The country would benefit further from capitalizing on its strategic location and road network to attract more trade and cargo transit, while also deepening reforms to secure more stable long-term growth for its citizens.”Inflation forecasts are unchanged at 4.0% in 2025 and 3.0% in 2026, as projected in April. This is supported by lower global fuel prices, a stronger Georgian lari, and prudent fiscal policy. A weakening United States (US) dollar contributed to a 3.5% appreciation of the lari in the first half of 2025, while the fiscal deficit remained well within 3.0% of GDP and public debt stood at 35% of GDP.Georgia’s external sector also expanded, according to the report. Merchandise exports rose by 13.7% in the first half of 2025, while imports increased by 12.4%. Vehicle reexports, a key source of foreign exchange, grew by 30.3%. However, a 25% US tariff on imported vehicles introduced in April 2025 may raise prices for second-hand vehicles sourced from the US, potentially reducing Georgia’s reexports. Even so, growth in services—particularly in tourism, transport, and information technology, supported by rapid technological advances—is expected to offset any future slowdown in merchandise exports.Tourism revenues grew at an annual rate of 3.8%, building on record-high receipts in 2024, while overall service exports expanded by 10.2%, reflecting Georgia’s emerging role as a key transit route for Trans-Caspian trade and cargo movements.Higher transfers from the US and Europe helped increase remittances by 3.5% in the first half of 2025, despite a 26.5% drop in transfers from Russia. Foreign direct investment (FDI) declined by 7.7%, mainly due to weaker investment in most sectors outside information and communication, though the share of reinvested FDI remained high at 83.6%.Downside risks to growth include regional geopolitical tensions, heightened trade and financial vulnerabilities in global markets, economic fragmentation and trade sanctions, as well as slowing growth in Russia and other trade partners. In addition, persistently high global interest rates and tighter financial conditions may limit capital inflows.ADB has supported Georgia since 2007 and is one of the country’s largest multilateral development partners. ADB’s loans, grants, and technical assistance to Georgia total $5 billion. ADB’s five-year country partnership strategy with Georgia aims to help the nation develop into a green and inclusive regional gateway, while supporting sovereign and private sector investments, policy reforms, capacity building, climate resilient infrastructure, and regional integration.ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members-50 from the region.

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