Georgia Economy

Georgia Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax system

Basic data

The Georgian economy was able to respond to the pandemic shock thanks to government policies and the flexibility of the business sector. In 2021, GDP grew by 10.6%, foreign trade by 25.4%, foreign investment by 102% and tourism revenue by 130%. Remittances, which accounted for nearly 13% of Georgia’s GDP in 2021, grew by 25%. The average rate of inflation reached 13.9%, the prices of many products increased even more, mainly due to the weakening of the local currency lari (GEL) against both the EUR and the USD. Only thanks to the interventions of the National Bank of Georgia did the currency fall sharply. Georgia continued to borrow abroad, and not always very advantageously. Foreign debt rose by 9% and unemployment by 2.1%. In 2022, the government expected economic growth of 6.0%, due to the war in Ukraine, it was forced to reduce the expected growth to 3%. The most important export destinations of Georgia in 2021 were China, Russia and Azerbaijan, the largest share of domestic exports were copper ores and concentrates, iron alloys and automobiles. An important and traditional agricultural export commodity is wine. The largest imports to Georgia come from Turkey, Russia and China and are automobiles, concentrates and oil and copper ores. Check ebizdir for economical facts of Georgia.

By the end of 2022, the Georgian government expects to reduce the state debt to 51.1% of GDP. Due to the lifting of all restrictions related to the Covid-19 pandemic, it can be assumed that 2022 will bring a much-needed recovery in tourism (12% of GDP). The Government of Georgia is also working on updating the program to support foreign investment projects with a state contribution of up to 300,000. USD, which aims to support the growth of foreign direct investment in the country, the inflow of knowledge and technology, and the creation of new jobs in Georgia. In order to stimulate economic growth, the government intends to finance infrastructure projects worth GEL 3 billion (approx. EUR 952 million) through loans, which are expected to create up to 20,000 jobs. In 2022, the government also plans to sell 25 state-owned enterprises, which should bring 300 million to the state budget in 2022.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 5.1 -4.9 10.6 5.2 4.5
GDP/population (USD/PPP) 14,570.00 13,837.20 15,880.00 17,220.00 18,540.0
Inflation (%) 4.8 5.3 13.9 6.2 4
Unemployment (%) 17.6 18.5 20.6 18.1 17.9
Export of goods (billion USD) 3.8 3.4 4.3 5.5 5.9
Import of goods (billion USD) 9.3 8.5 10.0 12.7 13.4
Trade Balance (Billion USD) -5.5 -5.1 -5.7 -4.6 -4.7
Industrial production (% change) ON ON ON ON ON
Population (millions) 3.7 3.7 3.7 3.7 3.7
Competitiveness ON ON ON ON ON
OECD export risk 06.VII 06.VII 06.VII ON ON

Source: EIU, OECD, IMD, Geostat

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -5.8
Public debt (% of GDP) 53.5
Current account balance (billion USD) -1.6
Taxes 2022
F.O 20%
VAT 18%

The expected budget deficit in 2022 is 4.3%, which is still more than the 3% budget deficit limit set by the Economic Freedom Act.

The state budget for 2022 envisages expenditures of 19.2 billion GEL (approx. EUR billion), while the government, when drawing it up, counted on economic growth of 6% and expected tax revenues of 1 billion GEL (approx. EUR billion), which is an increase of the state budget by GEL 332 million (approx. EUR 105 million). Compared to 2021, state budget revenues were expected to increase by GEL 2.01 billion (approximately EUR 592,000) thanks to savings on discontinued government programs to help businesses affected by the pandemic. But the government will probably be forced to revise the budget with regard to expenses related to the effects of the war in Ukraine. The Georgian government plans to obtain foreign loans in the amount of GEL billion (approx. EUR billion), including budget support from the IMF.

Based on the state budget for 2022, the state debt should be reduced by 8.9% to GEL 3billion (approx. EUR 10.7 billion) by the end of 2022, i.e. 51.1% of GDP. Of this, GEL 27 billion (approx. EUR 8.5 billion) will fall on foreign debt and GEL billion (approx. EUR billion) on domestic debt.

Banking system

The banking system is one of the fastest growing industries in Georgia. After the crisis in 2008 and 2009, the banking sector was stabilized thanks to the support of international financial institutions and the conservative policy of the National Bank of Georgia (NBG). Its status is defined by the Constitution of Georgia and its main goal is to ensure price stability. In its current form, the NBG has existed since 1991 and, according to the constitution, it is independent in its activities, the legislative and executive authorities do not have the right to interfere in its activities. The rights and obligations of the NBG as a central bank, the principles of its activity and the guarantee of its independence are defined in the Organic Law of Georgia on the National Bank of Georgia. Like central banks in European countries, it conducts monetary policy, holds the country’s international foreign exchange reserves and supervises the financial sector. As of 4/25 2022, 14 commercial banks were operating on the Georgian market, offering their services to both citizens and companies. The number of commercial banks in Georgia decreased from 15 to 14 after Credo Bank bought Finca Bank Georgia last year.

The most important banks:

TBC Bank – the largest bank with the largest number of branches across the country; owned by 2 Georgian citizens (Mamuka Khazaradze 10.25%; Badri Japaridze 5.99%), EBRD (8.03%) and several international corporations;

Bank of Georgia – the second most important bank with the largest network of branches owned by Georgian citizens and foreign partners;

Liberty Bank – owned by a Georgian (Irakli Otar Rukhadze 30.40%), a British (Benjamin Albert Marson 30.39%) and a Russian citizen (Igor Alekseev 30.39%);

BasisBank – Chinese bank;

VTB Bank Georgia – Russian bank (still registered in Georgia as of 25/04/2022, but due to sanctions it stopped its activities and its clients were taken over by Basis Bank and Liberty Bank).

Challenges facing the banking sector in Georgia include increased debt burden due to foreign currency loans to unsecured borrowers; over-indebtedness of a vulnerable part of the population; fierce competition in the business and provision of mortgages based on unsubstantiated real estate prices; cyber risks; potential growth of unregulated financial intermediation services. Although larization is on the rise in the medium term, a high share of assets in foreign currencies (mainly USD) remains due to the persistent mistrust of citizens in the local currency.

As of April 25, 2022, the non-banking sector in Georgia was represented by 38 microfinance institutions, 343 lending entities, 773 exchange offices and 1 credit union. Total assets of the non-banking financial sector amounted to approximately GEL 2.44 billion (EUR 775 million), with the largest share of microfinance institutions accounting for almost 2.8% of the total financial sector. Lending regulation has almost completely driven online lenders out of the market, created problems for microfinance and further increased the already very high share of banks. As in previous years, the protection of consumer rights in the financial sector and the promotion of financial literacy of the population remain important priorities of the NBG. The NBG also worked to improve the legislative framework in line with international best practice.

Tax system

In order to improve the investment and business environment in Georgia, the government introduced a new tax system between 2004 and 2008. It implemented liberal economic legislation and significantly reduced the number of taxes from 21 to the current 6. There is no inheritance tax, property transfer tax, social tax, etc. According to the organic referendum law, any tax increase must be approved by referendum.

The following taxes are collected in Georgia: ·

Corporate income tax: 15% ·

Personal income tax: 20% ·

Tariff: 0%, 5%, 12% (most import tariffs have been completely abolished, in addition, there are no quantitative quotas for imports or exports) ·

Value added tax: 18% ·

Consumption tax: tobacco products, alcohol, fuel and personal motor vehicles (various rates) ·

Dividends are taxed at 5%


Georgia currently has double taxation agreements with 45 countries. The double taxation agreement with the Czech Republic entered into force on 4 May 2007. Current information regarding the tax system can be found on the website of the Tax Office ( ).

Georgia Economy