Investment News

Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. Information in this issue was taken from BM.ge

Refinancing rate remains unchanged at 8.25%

On July 2, the National Bank of Georgia’s (NBG) Monetary Policy Committee left the refinancing rate unchanged at 8.25%, citing easing energy prices but continued uncertainty surrounding inflation.

Annual inflation stood at 5.7% in May, largely reflecting higher international energy prices following geopolitical tensions in the Middle East. While headline inflation remains above the NBG’s 3% target, the central bank noted that recent declines in oil prices, supported by optimism surrounding a potential peace agreement between the United States and Iran, are expected to reduce inflationary pressure during the second half of the year.

Economic activity remains robust. Georgia’s economy expanded by 6.2% in April, bringing average growth during the first four months of 2026 to 8.3%. According to the NBG, high-productivity sectors continue to drive economic growth, helping offset demand-side inflationary pressures.

The central bank reiterated that monetary policy will remain data dependent, adding that it stands ready to tighten policy if external inflationary shocks become more persistent. Under its baseline scenario, inflation is expected to average 4.9% in 2026 before gradually returning to the 3% target over the medium term.

The next meeting of the Monetary Policy Committee is scheduled for July 29.

IT sector continues rapid expansion

On June 30, data published by the NBG showed that Georgia’s IT sector generated $441.3 million in foreign revenue during the first quarter of 2026—an increase of 65% year-on-year.

The sector’s strong performance follows a record 2025, when annual revenues reached $1.15 billion, up 67% from the previous year.

The rapid expansion of information technology services contributed significantly to growth in Georgia’s broader information and communications sector, which expanded by 36% during the first quarter and reached 2.2 billion GEL. Employment has also risen sharply. The number of people working in information and communications increased from 30,600 in 2021 to more than 54,500 in 2025, reflecting both domestic growth and the relocation of technology professionals to Georgia in recent years.

Pension Fund updates investment governance

On July 1, the Pension Fund of Georgia adopted an updated investment policy document reflecting the institution’s new governance structure following its transformation from the Pension Agency into the Pension Fund.

While the core investment philosophy remains unchanged, the revised policy clarifies decision-making responsibilities and introduces a more prominent role for the newly established Investment Committee. Under the updated framework, the committee will determine investment horizons, benchmark portfolios, and ESG policies, subject to approval by the Fund’s Governing Council.

The new rules also strengthen reporting requirements by requiring deviations from investment limits to be reported immediately to the Fund’s board, along with corrective action plans.

As of July 2026, the Pension Fund manages more than 9.5 billion GEL in assets on behalf of approximately 1.5 million participants. Nearly 99% of assets remain invested in the Conservative Portfolio, while the Balanced and Dynamic portfolios continue to attract only a small share of contributors despite generating higher investment returns.

Moody’s improves Georgia’s outlook to stable

On July 1, Moody’s affirmed Georgia’s Ba2 sovereign credit rating while upgrading the country’s outlook from negative to stable.

The agency cited Georgia’s strong economic performance, prudent fiscal management, and resilient macroeconomic fundamentals as the primary reasons for the revision. Moody’s forecasts economic growth of 6.4% in 2026, followed by 5.5% in 2027, despite continued geopolitical uncertainty.

The rating agency also highlighted the continued decline in public debt, which has fallen from nearly 60% of GDP in 2020 to approximately 34% in 2025. Moody’s expects the debt ratio to continue declining over the medium term, supported by sustained economic growth and fiscal discipline.

While noting that political and geopolitical risks remain, Moody’s concluded that Georgia’s economic resilience and strategic position along the Middle Corridor continue to support the country’s credit profile.

Exports approach $3.1 billion in first five months

On July 1, preliminary foreign trade data showed that Georgia’s exports reached $3.1 billion during January-May 2026, representing a 19.8% increase compared with the same period last year.

Passenger cars remained Georgia’s largest export category, although exports of petroleum products and metal ores recorded some of the strongest growth during the period.

Kyrgyzstan remained Georgia’s largest export destination, receiving $355.2 million worth of goods, largely driven by vehicle re-exports. China ranked second with exports totaling $327.5 million, followed by Azerbaijan at $269.3 million.

Technology conference brings global industry leaders to Tbilisi

On July 1, Tbilisi hosted Change Inspire 2026, one of the country’s largest technology conferences, bringing together approximately 1,000 participants from the technology and business communities.

Organized by HT Solutions with the support of TBC, the conference focused on artificial intelligence, cybersecurity, cloud technologies, digital transformation, data analytics, infrastructure, and DevOps under the theme “Big Tech. Global Legends. One Future.”

Representatives from Nvidia, Google, Amazon Web Services, Microsoft, and Google Cloud joined regional experts and TBC’s own technology leadership to discuss emerging trends and practical applications of new technologies.

The conference highlighted Georgia’s growing technology ecosystem and the increasing role of digital innovation in the country’s economic development.

Corporate bond market reaches 2.7 billion GEL

Investment bank Galt & Taggart reported in July that Georgia’s local corporate public bond market expanded to 2.7 billion GEL during the first five months of 2026.

GEL-denominated bonds accounted for the largest share of the market at 1.39 billion GEL, followed by USD-denominated bonds totaling 1.23 billion GEL. Euro-denominated bonds represented a comparatively small share of the market.

According to the report, the continued expansion of GEL-denominated issuance has been supported by government incentive programs and reflects the gradual deepening of Georgia’s domestic capital markets.

National Bank strengthens international reserves

The National Bank of Georgia (NBG) reported record foreign exchange purchases through its BMatch platform, acquiring $632.9 million during May alone. Combined with previous interventions, the central bank purchased $1.46 billion through the platform during the first five months of 2026, increasing Georgia’s foreign exchange reserves by $536 million in May to a historic high of $7 billion.

The NBG also announced the purchase of an additional $100 million in LBMA-standard monetary gold, bringing the country’s total gold holdings to 7.88 tons. As a result, monetary gold now accounts for 15.5% of Georgia’s international reserves, which stand at 114.8% of the International Monetary Fund’s reserve adequacy ratio.

According to the NBG, the gold purchase forms part of its long-term reserve management strategy aimed at diversifying reserve assets, strengthening resilience to geopolitical risks, and protecting against inflation. The central bank first purchased monetary gold in 2024, acquiring 7.13 tons. Since then, rising global gold prices have more than doubled the market value of those initial holdings.

The NBG noted that central banks worldwide purchased more than 970 tons of gold during the first half of 2026, underscoring the growing importance of the asset amid continued geopolitical uncertainty. Overall, Georgia’s international reserves have increased by approximately $2.4 billion, or 53%, over the past year.

Business forum highlights growing ties with Uzbekistan

In July, Tbilisi hosted the Uzbekistan-Georgia Business Forum, bringing together government officials and private sector representatives to explore new opportunities for trade and investment.

Although bilateral trade remains relatively modest, economic relations have strengthened in recent years. Trade turnover reached $309 million in 2025, with Georgian exports totaling $220 million. Passenger cars remained the largest export category, followed by pharmaceuticals, beverages, vaccines, and medical equipment.

Uzbek investment in Georgia remains limited, totaling just $276,000 during the first quarter of 2026. However, tourism continues to expand, while growing business interest has been supported by TBC Bank’s entry into the Uzbek market.

Inflation remains elevated in June

On July 3, Geostat reported that annual inflation reached 5.8% in June, while monthly inflation stood at 0.1%.

Food products continued to account for many of the largest annual price increases. Plums recorded the sharpest rise at nearly 99%, followed by diesel fuel (48.7%), gold wedding rings (45.9%), green beans (45.1%), newspapers (41.4%), peaches (37.7%), cucumbers (34.9%), pears (34.5%), airline tickets (32.5%), and women’s winter shoes (32.1%).

Core inflation measured 3.5%, while core inflation excluding tobacco stood at 3.2%.

Although prices declined modestly during the month for clothing, footwear, vegetables, dairy products, and sugar, higher prices for hotels, restaurants, transportation services, and selected food categories continued to keep overall inflation above the national bank’s target.

Georgia to lead BSEC banking and finance group

Beginning July 1, Georgia assumed a two-year term as Lead Country of the Banking and Finance Working Group of the Organization of the Black Sea Economic Cooperation (BSEC).

According to the National Bank of Georgia, the appointment will strengthen cooperation between the country’s financial sector and central banks across the Black Sea region while supporting greater exchange of regulatory experience and best practices.

As Lead Country, Georgia will coordinate the group’s activities and organize regular meetings involving banking and financial institutions from the organization’s member states.

Foreign student residency rules tightened

Parliament approved amendments strengthening Georgia’s rules governing the residence of foreign students on July 1.

Under the new legislation, students seeking admission to Georgian universities must demonstrate language proficiency as determined by the government and complete at least one-third of their required academic credits each year.

Student residency may now be revoked if studies are suspended for more than 90 days or if students remain outside Georgia for more than 183 days without an approved reason, such as participation in an exchange program or medical treatment.

The legislation also introduces stricter measures against fraudulent marriages entered into solely for residency purposes and further clarifies procedures governing residence permits and the expulsion of foreign nationals.

July brings new regulatory changes

A number of legislative and regulatory changes entered into force on July 1.

The National Bank expanded restrictions on foreign currency lending, requiring loans of up to 1 million GEL to be issued exclusively in the national currency for borrowers whose income is denominated in lari.

The Rural Development Agency also launched a unified State Agricultural Financing Program, consolidating several existing agricultural support mechanisms into a single financing framework.

Tbilisi introduced new regulations governing pet ownership, including registration requirements, ownership limits, and higher fines for violations. New certification requirements also took effect for motorized boats operating on lakes and rivers.

Additional changes included the establishment of two new public agencies under the Ministry of Environmental Protection and Agriculture: the National Gastronomy Agency and the Information Technologies, Environmental Protection, and Agroservices Agency.