Business
Georgia Grows 7.8% in H1 2026 as ICT Supplies Nearly 29% of Growth
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Georgia's economy grew 7.8% in real terms in the first half of 2026, according to Geostat figures analysed by TBC Capital, down from 8.6% in the same period of 2025. The headline is strong, yet the composition of growth is shifting in ways that matter for businesses and lenders.
Information and communication technology was the single largest contributor, accounting for almost 29% of real GDP growth at basic prices, more than twice the next-largest sector. Services as a whole made up about 96% of real growth, while agriculture and construction made negative contributions. Trade and transport added about 1.2 percentage points more than a year earlier, but education, which contributed roughly 1.8 points in the first half of 2025, had virtually no impact this year, and the real estate contribution fell by more than half, according to Georgia Today.
External trade tells a similar story of change. Exports rose 22.1% year-on-year in January to August, with oil products accounting for more than 64% of the increase, while vehicle re-exports fell 22%. Imports grew 8.0%, with oil imports responsible for about 65% of that rise and vehicle imports down 12.5%. TBC Capital estimates the trade deficit narrowed to 26.4% of GDP over the period. In other words, a large part of the export gain reflects oil products rather than domestic production, a distinction investors should keep in mind.
There are also early warning signs on household inflows. Remittances fell 8.2% year-on-year in August, driven by an 88% monthly drop in transfers from Russia after EU sanctions on the Zolotaya Korona payment system. Tourism indicators remained strong, with card spending growing in September, which offers some offset for services and hospitality.
The picture is of an economy still expanding quickly but leaning increasingly on technology services and trade flows rather than on construction and property. For banks, that favours lending to ICT, logistics and tourism-linked firms over real estate developers. For foreign investors, the ICT concentration is an opportunity, but it also means growth is more exposed to a narrower set of drivers than the headline suggests.
Georgia's more recent data point in the same direction. Civil.ge reported that GDP rose 6.3% in August 2026, following the 6.9% second-quarter reading, which indicates a gradual deceleration from the first-half pace rather than a sudden stall. A slowdown from 8.6% to 7.8% on a half-year basis is modest, but it is happening alongside softer construction, weaker real estate and falling remittances, so the margin for error is thinner than the headline implies.
The sectoral detail also has policy implications. When ICT supplies nearly 29% of growth, the quality of that growth depends on whether it is anchored in exportable services, domestic digital adoption or re-export activity. Mining and manufacturing drove 30% of output growth but under 6% of real GDP growth because of high intermediate consumption and higher prices, a reminder that value added, not gross output, is what ultimately lifts incomes. Businesses planning capacity should look past gross turnover and focus on margins and value added.
The next test is the second half. If the slowdown in construction and real estate deepens, the ICT and trade engines will need to carry more weight, and the remittance disruption could start to weigh on consumption. The 7.8% figure is solid, but the composition suggests Georgia's growth model is evolving rather than simply repeating last year's pattern. Watch the October and November monthly releases, the Zolotaya Korona fallout and the pace of oil-product trade for early signs of which way the balance tips.
