Finance
TBC Capital Sees Lari at GEL 2.60-2.65 by Year-End as Property Tax Reform Nears
September 6, 2026
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TBC Capital has published a year-end forecast putting the Georgian lari at GEL 2.60-2.65 against the US dollar, a projection that implies broad currency stability into the close of 2026 rather than the depreciation pressure that periodically hits frontier currencies in the fourth quarter.
The call sits on reasonably firm ground. Georgia's external position has improved: the current account deficit narrowed to 2.6% of GDP in 2025 with tourism receipts up 6%, and export performance has been strong, with shipments rising 26.6% year-on-year in February 2026 and 22.9% across the January-February window to $1,026 million. Growth in precious metals, ferro-alloys, nuts, wine, spirits and copper drove the gains, offsetting a decline in car re-exports.
Banking sector fundamentals reinforce the picture. Non-performing loans held broadly stable at 2.5%, return on equity ran at 22% and return on assets edged up to 3.9% as of end-February 2026 — metrics that place Georgian banks among the better-capitalised in the wider region and reduce the risk of a credit-driven currency shock. Macro data is published by Geostat.
Running alongside the currency call is fiscal policy. A personal property tax reform model was slated for introduction within days as of early September, part of a broader effort to widen the revenue base while the 2026 budget targets a 2.5% of GDP deficit and a rebound in infrastructure capital spending. Property taxation is politically sensitive in Georgia, and the design — thresholds, exemptions, valuation methodology — will determine whether it raises meaningful revenue or becomes another lightly enforced levy. The IMF has consistently flagged revenue mobilisation as a priority.
For businesses, a stable lari in the 2.60-2.65 band simplifies import pricing and dollar-denominated debt service through year-end. For investors, the combination of contained currency risk, 5.3% projected growth and a 22% banking ROE is a reasonable risk-adjusted proposition — provided the fiscal reform lands without disrupting the property market.
The variable to watch is FDI, still subdued at 3.6% of GDP, which remains the weakest link in the story.
