The European Commission has published its revised spring 2026 economic forecast, which includes an assessment of Georgia’s economic outlook.

The report indicates that Georgia’s GDP growth rate is expected to decelerate slightly compared to previous years. However, it is projected to remain stable within the range of 5 to 5.5%. Additionally, the Commission forecasts that inflation in Georgia will continue to run high throughout 2026.

“Following another year of economic expansion in 2025, Georgia’s GDP growth is projected to decelerate but to remain robust at 5-5.5% in 2026 and 2027. The impact of the conflict in the Middle East on growth is likely to be relatively limited and is channelled mainly through higher energy prices.

Services, such as ICT, education and tourism, are expected to be the main drivers of growth. Inflation picked up last year due to rising food prices and demand pressures, and is set to stay elevated in 2026 due to high energy prices. The current account deficit is projected to widen, driven by the increasing bill on imported oil and gas,” reads the report.

Additionally, the European Commission reports that Georgia achieved a strong economic growth of 7.5% in 2025, although this fell short of the record 9.7% growth recorded in 2024.

“Economic growth remained very strong in 2025 at 7.5%, despite decelerating from 9.7% recorded in 2024. On the supply side, growth was driven by services, in particular ICT and education, and by manufacturing, while the contribution of agriculture and mining was negative. On the demand side, private and government consumption remained the main contributors to growth, supported by rising wages, spending of Russian migrants and an increase in remittances. In contrast to previous years, investment decreased in real terms in 2025, due to delays in public investment projects and low foreign direct investment inflow. The contribution of net exports was slightly positive,” reads the report.

The report also addresses the inflation forecast. According to the European Commission, inflation in Georgia is expected to remain relatively high in 2026, driven by rising fuel and energy prices. However, it is projected to decline gradually in 2027, approaching the 3% target.

Regarding public debt, it stood at 36.1% of GDP in 2025 and is expected to decrease gradually to around 35% by 2027. The report highlights that in January 2026, Georgia successfully refinanced USD 500 million in Eurobonds at a low interest rate of 5.1%.

Furthermore, the European Commission notes that the ongoing conflict in the Middle East has negatively impacted the EU economy. The challenging geopolitical climate and ongoing uncertainties surrounding U.S. tariffs continue to put pressure on economic growth. The report also discusses economic indicators in Eastern Europe. According to the forecast, Georgia’s growth will remain within the 5-5.5% range, while Ukraine is expected to grow by 1.5%, and Moldova by 2%.