Finance
Foreign direct investment into Georgia fell 22% year on year to $750.1 million in the first half of 2026, according to Geostat data reported by Interfax on September 8.
First-quarter inflows were $281.3 million, down 20%, and the second quarter fell 23.2% from a year earlier. The picture is less dramatic than a previous report suggested: an earlier claim of a 50% rise in Q1 was overturned after Geostat revised its 2025 figures upward, including the first quarter of 2025.
What changed inside the numbers
The composition is mixed. Equity investment rose 26.8% to $314.3 million, which is the form of FDI most associated with new capital, while reinvested earnings fell 42.6%. The debt component narrowed sharply, with outflows falling 80% to $14.1 million.
By source, China led with $236 million, followed by the United Kingdom ($176 million), Malta ($63.4 million), the United Arab Emirates ($51.6 million) and Azerbaijan ($45.3 million). Together those five countries account for about $572 million, or more than three-quarters of the total.
Sector concentration is high. Financial and insurance activities attracted 44% of inflows and real estate 25.6%, adding up to roughly 70%. Manufacturing took 12.6% and construction 7.3%. That leaves little room for the mining, logistics and energy projects that policymakers say they want to attract.
Context and outlook
The decline sits alongside strong headline growth. The Asian Development Bank now projects Georgian GDP growth of 6.3% for 2026, while the National Bank of Georgia has held its refinancing rate at 8.25% to contain energy-driven inflation, as noted by Interfax. Higher domestic rates and a tight monetary stance can reduce the appeal of reinvesting profits locally.
Analysts at Galt & Taggart expect 2026 incoming FDI of $1.8 billion, slightly below the $1.9 billion recorded for full-year 2025, a year in which FDI rose 19.3% on adjusted data. Reaching that forecast would require a stronger second half, around $1.05 billion.
For investors the signal is selective rather than negative. New equity capital is growing, but reinvestment is weaker and sources are concentrated in a few countries. The next Geostat release for the third quarter will show whether the Anaklia port rail link and other infrastructure projects begin to broaden the investor base.
