Abashidze: "Middle Corridor" Remains Georgia’s Main Transit Route

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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Interest payments on the AZN 50 million (€25 million) one-year floating rate note reference the AZIR (the Azerbaijan Interbank Rate) index. The bond was lead-managed by ABB-İnvest İnvestment Company and Unicapital İnvestment Company. An application has been made for the bond to be listed on the Baku Stock Exchange.The proceeds of the successful issuance will support the EBRD’s AZN lending in Azerbaijan.AZIR was established by the Central Bank of Azerbaijan in May 2023 and modified in May 2025 with technical assistance from the EBRD, to provide a new money-market benchmark reflecting the average daily rate for one-day unsecured interbank transactions (often referred to as the “risk-free rate” or “RFR”). It supports effective liquidity management by Azerbaijan’s domestic banking sector and provides the central bank with an important indicator for monitoring monetary policy transmission.AZIR simplifies the calculation of interest payments for financial instruments and its introduction follows the launch of RFRs in other countries, including in the United Kingdom and the United States of America.The policy dialogue that culminated with this issuance began several years ago. Discussions highlighted the regulatory changes needed to strengthen Azerbaijan’s domestic capital market. This milestone launch was made possible by strong backing from the Central Bank of Azerbaijan and the close involvement of the Baku Stock Exchange and the National Depository Centre.The EBRD is the largest institutional investor in Azerbaijan. The Bank has invested over €3.6 billion in Azerbaijan across 200 projects in sectors including renewables, connectivity and sustainable infrastructure.

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Lion Finance Group (BGEO LN) shares closed at GBP 76.05/share (+2.29% w/w and +8.10% m/m). More than 226k shares traded in the range of GBP 74.00 - 77.30/share. Average daily traded volume was 64k in the last 4 weeks. The volume of BGEO shares traded was at 0.51% of its capitalization.TBC Bank Group (TBCG LN) closed the week at GBP 44.95/share (+2.51% w/w and +3.81% m/m). More than 462k shares changed hands in the range of GBP 43.80 - 46.30/share. Average daily traded volume was 112k in the last 4 weeks. The volume of TBCG shares traded was at 0.82% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 23.70/share (+0.85% w/w and +0.64% m/m). More than 264k shares traded in the range of GBP 23.10 - 24.60/share. Average daily traded volume was 58k in the last 4 weeks. The volume of CGEO shares traded was at 0.67% of its capitalization. 

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A GEL 2,000 fine was levied for submitting incorrect information to the NBG during registration verification as a loan issuer. The largest portion of the fine, GEL 15,000, was related to serious flaws in the company’s software system, which lacked mechanisms to detect suspicious or unusual transactions and identify related parties.Additionally, Flexi Capital was fined GEL 2,000 for submitting incorrect information in two separate reports concerning money laundering and terrorist financing risks, with each instance carrying a GEL 1,000 penalty. The NBG emphasized that these deficiencies represent significant shortcomings in the prevention of illicit financial activities.Registered in 2023, Flexi Capital LLC is owned by Shalva Jalabadze (90%) and Guram Torotadze (10%). The fines were imposed under the AML/CFT Supervision Rule, approved by the Georgian government in 2018, which requires financial institutions to monitor and report risks related to money laundering and terrorist financing.

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“A sad day for democracy in Georgia. OSCE/ODIHR unable to observe local elections, recommendations unaddressed. Regrettable use of violence. Repressive laws and jailing opposition leaders further undermine trust in Georgia’s elections,” the statement added. A sad day for democracy in Georgia. OSCE/ODIHR unable to observe local elections, recommendations unaddressed. Regrettable use of violence. Repressive laws and jailing opposition leaders further undermine trust in Georgia’s elections. pic.twitter.com/q2xf4ztG4j — Norway MFA (@NorwayMFA) October 5, 2025 The elections, held on October 4, 2025, saw the Georgian Dream party win all 64 municipalities, with some results reportedly reaching 100%.The vote took place amid ongoing protests in Tbilisi. Observers noted that international and domestic monitoring was largely absent, raising concerns about transparency and fairness in the process.Following the elections, all five members of a local organizing committee were arrested. Those detained include Paata Burchuladze, leader of the Rustaveli Avenue movement; Murtaz Zodelava, former UNM official; Irakli Nadiradze of the National Movement; Paata Manjgaladze of Strategy Builder; and Colonel Lasha Beridze.

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In September 2025, Georgia’s annual inflation reached 4.8%, up from 4.6% in August.The main contribution came from domestic inflation, which increased by 6.3% y/y (Aug: 6.6%), followed by mixed-goods inflation, which accelerated to 7.8% y/y (Aug: 6.3%). In contrast, imported goods prices declined further by 1.1% y/y.Meanwhile, core inflation, excluding food, energy, and tobacco, eased to 2.1% y/y in Sep-25, down from 2.8% posted in previous month.By categories, annual inflation in Sep-25 was largely driven by price increases in food and non-alcoholic beverages (+11.9% y/y, +3.89ppts), healthcare (+9.0% y/y, +0.76ppts), alcoholic beverages & tobacco (+4.1% y/y, +0.26ppts) and hotels & restaurants (+7.1% y/y, +0.23ppts) categories. Meanwhile, deflation was recorded in transport (-2.1% y/y, -0.26ppts), furnishings, household equipment & maintenance (-3.7% y/y, -0.21ppts), communication (-4.2% y/y, -0.14ppts) and clothing & footwear (-2.0% y/y, -0.13ppts). 

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