Finance
Georgia's Economy Posts 8.4% Growth as IMF Flags Banking Sector Risks
April 23, 2026
4
Min
Georgia's economy expanded at 8.4% in January-February 2026, outpacing its 2025 full-year rate of 7.5%, as the International Monetary Fund completed its 2026 Article IV Mission and projected the country's growth will moderate to 5.3% for the full year—still among the highest rates in the region.
The IMF's April 2026 review offered a broadly positive assessment of Georgia's macroeconomic management while flagging specific vulnerabilities in the banking sector and external accounts. Georgia's reserve position has been a particular bright spot, with gross international reserves reaching historic highs and exceeding the IMF's reserve adequacy threshold for the first time since 2022.
Growth has been driven by information and communication technology, transport services, and education—sectors that have benefited from the influx of remote workers and tech company relocations from Russia and Ukraine beginning in 2022. However, the IMF's concluding statement highlighted the high share of unhedged foreign currency bank loans, rapid expansion of consumer lending, and increasingly risky bond issuances tied to real estate development as areas warranting supervisory attention.
On the external side, the current account deficit is projected to widen to 5% of GDP in 2026, driven by higher global oil prices and softer tourism inflows. OC Media reported that the IMF sees continued economic growth as its base case, but identified Iran war escalation as the key downside scenario, given Georgia's dependence on Israeli and Gulf-origin tourism.
For investors, Georgia remains one of the region's most dynamic open economies. The IMF's 2026 review reinforces the positive baseline while drawing attention to banking and external account risks that could amplify shocks in a more volatile global environment. The National Bank has implemented macro-prudential measures to limit excessive credit growth, but the Fund indicated further progress is needed on central bank governance reform.
