Business Insider Georgia conducted an exclusive interview with Lesley Bearman Lahm, ADB Country Director in Georgia. In the interview, Lesley Bearman Lahm discusses Georgia’s economic performance and macroeconomic developments in 2026, the country’s medium-term economic outlook, long-term growth potential and competitiveness, ADB’s strategic priorities and investment opportunities, infrastructure development and regional connectivity, including the Middle Corridor, energy security and renewable energy potential, private-sector and SME development, access to finance, and the key structural reforms and policy priorities needed to strengthen Georgia’s economic resilience and support sustainable and inclusive growth.

How would ADB assess Georgia’s economic performance and macroeconomic developments in the first half of 2026? What were the key trends and developments during this period, and what are ADB’s expectations for the remainder of 2026 and the medium-term economic outlook?

Georgia’s economy performed more strongly than expected in the first half of 2026. Real GDP expanded by 7.9% year-on-year, supported by strong services activity, resilient domestic demand, and exports. This prompted ADB to raise its 2026 growth forecast in September from 5.5% to 6.3%. At the same time, higher global energy and food prices increased inflationary pressures. Average inflation reached 5.2% in the first half, with particularly strong increases in food and transport prices. ADB therefore raised its 2026 inflation forecast to 5.2%.

Georgia’s external position has held up well. Tourism picked up over the summer, bringing receipts for the first nine months about 4% above last year’s level. Exports of computer services also grew strongly, and foreign exchange reserves reached a record high in September.

For the remainder of 2026, the central picture is therefore one of stronger growth alongside higher imported inflationary pressure. The main external risks continue to come from geopolitical tensions, volatile energy prices, disruptions to global trade and transport routes, and weaker global demand. Over the medium term, maintaining macroeconomic stability while raising productivity and competitiveness will be increasingly important as growth normalizes from the high rates recorded in recent years.

How does ADB assess Georgia’s long-term economic potential and competitiveness relative to regional peers? What are the main structural challenges the country needs to address to sustain strong, inclusive growth and attract higher levels of foreign direct investment?

Georgia has important long-term advantages, including its strategic location between Europe and Asia, an open trade regime and extensive free-trade agreements, a relatively simple business environment, and growing capabilities in transport and logistics, tourism and other tradable services, and renewable energy. ADB’s operations are built around helping Georgia use these strengths to develop as a green and inclusive regional gateway.

Relative to many economies in the region, Georgia’s openness and connectivity are strengths. But competitiveness increasingly depends on what happens behind the border: productivity, workforce skills, innovation, quality infrastructure, efficient logistics, access to long-term finance and the ability of Georgian firms to integrate into higher-value regional and global supply chains.

What are ADB’s key priorities for Georgia for the remainder of 2026 and beyond? Which sectors do you see as offering the greatest potential for investment and development, particularly in transport, energy, municipal infrastructure, digitalisation and private-sector development?

Our priorities are guided by ADB’s Country Partnership Strategy for Georgia for 2024–2028, which focuses on supporting the transition toward a green and integrated economy and fostering a more resilient and inclusive society, with regional cooperation, environmental resilience, private-sector development, and digital transformation cutting across the program.

Transport and logistics remain important, given the broader economic benefits of stronger multimodal connectivity. The Tbilisi Bypass Project is ADB’s latest major investment in the East–West Highway, the INTERNAL. This information is accessible to ADB Management and Staff. It may be shared outside ADB with appropriate permission.

Middle Corridor and the CAREC Corridor 2, which largely falls to the Middle Corridor. Together with the Batumi–Sarpi road and earlier transport sector investments, it supports more efficient movement of people and freight and stronger regional connectivity.

Our other priorities are support for renewable energy production and the country’s energy security. ADB’s energy storage project is supporting the establishment of a battery storage facility at Ksani to strengthen grid stability and enable greater integration of renewable generation.

We also see strong potential in regional development and creating economic opportunities outside Tbilisi. ADB supports resilient urban infrastructure, green and recreational spaces, cultural heritage, and tourism- enabling infrastructure across Georgia.

Private-sector development cuts across these areas. ADB will continue to support MSME finance, local- currency and sustainable finance, capital-market development, digitalization, and the mobilization of private capital for infrastructure and green investment. The objective is to help translate infrastructure and connectivity into productive economic activity and jobs.

How does ADB assess Georgia’s infrastructure and regional connectivity agenda? What progress has been made in modernising roads, railways, ports and logistics infrastructure, and where do you see the greatest opportunities and remaining investment needs?

Georgia has made substantial progress in upgrading its main transport corridors, particularly its road network, where ADB has invested heavily. There has also been important progress in rail, with Georgian Railway completing its major modernization project at the end of 2025 and further rehabilitation and operational improvements continuing in 2026.

The competitiveness of the Middle Corridor and the CAREC Corridor 2, however, depends not on any single highway, railway, or port, but on how well the entire logistics chain functions. ADB’s CAREC work continues to highlight infrastructure gaps, border-processing delays, port and logistics constraints, and insufficient coordination across transport modes as issues that need to be addressed at corridor level.

How would you assess Georgia’s energy security and renewable energy potential? What role can the country play in the region’s green-energy transition, and what investments or policy measures are needed to unlock this potential?

Key priorities include strengthening transmission infrastructure and system flexibility, rehabilitating existing renewable assets, expanding wind and solar capacity, establishing transparent and bankable frameworks for private investment, and continuing electricity-market development. Environmental and social sustainability must be built into project design from the outset, particularly for large infrastructure and renewable projects.

ADB’s Energy Storage and Green Hydrogen Development Project will establish the country’s first large- scale battery energy storage system-a 200 MW/200 MWh facility at Ksani—to help manage fluctuations, strengthen grid stability, and enable greater integration of variable renewable generation.

How does ADB assess Georgia’s private-sector and SME competitiveness? What reforms or measures would be most important to improve the business environment, strengthen productivity and expand access to finance?

Georgia’s private sector has demonstrated considerable dynamism, but the next stage of development will increasingly depend on productivity and scale. For many SMEs, constraints extend beyond access to credit to skills, technology adoption, managerial capacity, export market access, infrastructure outside major urban centers, and participation in larger supply chains.

INTERNAL. This information is accessible to ADB Management and Staff. It may be shared outside ADB with appropriate permission.

Access to finance remains important, particularly longer-term financing in local currency. In 2026, ADB has continued to expand its partnerships with Georgian financial institutions to support MSMEs, including businesses outside Tbilisi, women-owned and women-led enterprises, and green investment.

What should be the country’s main policy and investment priorities to strengthen long-term economic resilience and development?

As discussed above, the key priorities are to preserve macroeconomic and financial stability while raising productivity and competitiveness. This requires continued investment in regional connectivity and logistics, energy security and renewables, human capital and digitalisation, alongside deeper local capital markets and better access to long-term finance. Strengthening private investment and helping Georgian firms move into higher-value activities will be central to sustaining resilient and inclusive growth over the medium term.