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

Central bank holds refinancing rate at 8% as inflation risks rise

The National Bank of Georgia (NBG) decided to keep the refinancing rate unchanged at 8% at its March 12 meeting, maintaining a tight monetary stance as external risks intensify.

The decision reflects escalating geopolitical tensions in the Middle East, particularly disruptions to transport routes through the Strait of Hormuz. According to the NBG, these developments have already contributed to rising energy prices and increased transportation costs globally, with early indications of transmission into the Georgian economy.

Inflation reached 4.6% in February 2026, slightly above the central bank’s 3% target. While food price pressures have begun to moderate, the rise in oil prices is expected to exert upward pressure on inflation in the coming months. Prior to the geopolitical escalation, inflation dynamics were broadly aligned with the central bank’s baseline scenario, which projected convergence toward the target beginning in the second quarter of 2026.

However, the updated assessment reflects a shift toward a higher inflation scenario, with uncertainty surrounding both the duration and intensity of global price pressures. The Monetary Policy Committee highlighted the risk that sustained increases in energy prices could lead to broader supply-side shocks, raising production and transportation costs and potentially triggering second-round inflation effects.

In such a scenario, central banks in advanced economies may be forced to tighten monetary policy further, increasing the risk of capital outflows from emerging markets, including Georgia. At the same time, the NBG emphasized that inflationary pressures could prove temporary if supply disruptions ease or alternative energy supply adjusts more quickly than expected.

The next Monetary Policy Committee meeting is scheduled for May 6.

Government raises vehicle excise taxes, drops import ban on older cars

The government introduced legislative amendments to increase excise taxes on vehicles over six years old on March 17, while reconsidering a previously proposed ban on importing older cars.

Under the revised approach, authorities have opted against imposing a strict prohibition. Instead, higher excise taxes—rising to 4.5 GEL per cubic centimeter from the previous 0.8 GEL—will serve as the primary tool to discourage the import of older, less efficient vehicles.

The legislation also includes increases in excise rates for newer vehicles. While rates for cars up to two years old remain unchanged at 1.5 GEL per cubic centimeter, increases apply to older categories: 3-year-old cars will see rates rise to 1.5 GEL (up 7%), 4-year-old cars to 1.5 GEL (up 25%), 5-year-old cars to 1.5 GEL (up 50%), and 6-year-old cars to 1.5 GEL (up 88%).

The changes are expected to increase the cost of vehicle imports. For example, the excise tax on a six-year-old car with a 2.5-liter engine would rise from approximately 2,000 GEL to 3,750 GEL.

The draft law also includes a preferential regime for hybrid vehicles, with a 60% reduced excise tax rate applying to cars under six years old.

Corporate bond market surpasses ₾3 billion

Georgia’s domestic corporate bond market surpassed a record ₾3 billion, coming in at ₾3.2 billion as of January 2026, according to recent data published by the National Bank of Georgia. Specifically, the largest number of bonds is denominated in dollars and amounts to 1.6 billion GEL, GEL-denominated bonds come in at 1.4 billion GEL, and bonds denominated in euros amount to 121 million GEL.

The milestone marks a significant step in the development of the country’s capital markets, reflecting a gradual shift in corporate financing patterns. Companies are increasingly turning to bond issuance as an alternative to bank lending, seeking longer-term funding and more diversified capital structures.

In 2025, a total of eight issues were carried out on the local corporate bond market, with the largest issuers being Georgian Healthcare Group and Tegeta Motors at 350 and 200 million GEL, respectively. The interest rate on bonds denominated in GEL is within 3-4%, to which the volume of the refinancing rate is added, which means that the final rate increases to around 12%. In the case of dollar-denominated bonds, the average interest rate is within 8-8.5%.

Despite this progress, the market remains relatively shallow by international standards, with limited secondary market liquidity and a concentrated investor base. However, the continued expansion of the corporate bond market suggests growing confidence in local financial instruments and a broader trend toward financial sector diversification.

Remittances increase 16% YoY, led by Italy

Remittances to Georgia increased 16% YoY in January 2026. Italy remained the largest source of remittances at $53 million, followed closely by the United States at $52 million (a 10% YoY increase), while inflows from Russia totaled $33.5 million, marking a 32% decline YoY.

Government bans sale of certain beverages in plastic bottles

On March 12, the Georgian government issued a decree prohibiting the sale of certain beverages—including water, juices, and beer—in plastic bottles.

Beginning July 1, 2026, public catering establishments will be prohibited from serving beverages to consumers in plastic bottles. From February 1, 2027, the production (except for export), import, and sale of beverages in plastic bottles will also be banned.

The regulation includes several exemptions. It does not apply to the supply and production of drinking water for the Ministry of Internal Affairs for operational and public safety purposes, or for the Georgian Defense Forces and military personnel during training and military operations.

The ban also does not apply to drinking water in containers of 3 liters or more, or to other beverages in containers of 20 liters or more.

Exports reach $1 billion in January–February

According to a report by Geostat released on March 13, exports increased by $114 million, or 27% YoY, to $546 million in February 2026. Imports grew by 8% over the same period, reaching $1.33 billion. In total, exports in January–February amounted to $1 billion (up 22.9% YoY), while imports totaled $2.48 billion (down 15.4%).

Georgia plans free trade agreement with Serbia

In February, the Georgian government approved plans to pursue a free trade agreement with Serbia, further expanding Georgia’s network of trade partnerships. While current trade volumes remain relatively modest, authorities see potential for growth in sectors such as agriculture, manufacturing, and services.

According to 2025 data, Georgia imported goods worth $19.3 million from Serbia, marking a 33.7% YoY increase. The top five imported products were cigars and cigarillos ($8.9 million), cardboard paper ($1.6 million), nitrogen fertilizers ($1.3 million), rubber pneumatic springs and tires ($978 thousand), and petroleum products ($656 thousand).

Exports to Serbia remained limited. In 2025, Georgia exported goods worth just under $1 million to Serbia, a 56.7% decline YoY. Key export items included calculating machines and their components ($340 thousand), medical and veterinary equipment ($240 thousand), ethyl alcohol ($202 thousand), fruits and nuts with or without added sugar ($63 thousand), and plywood ($55 thousand).

National Bank introduces stablecoin regulatory framework

The National Bank of Georgia approved a regulatory framework governing the issuance of stablecoins on March 6. The rules introduce requirements on reserve backing, transparency, and risk management, aimed at mitigating financial stability risks.

Unlike conventional virtual assets, whose prices are driven by supply and demand, stablecoins represent an obligation of the issuer to maintain a fixed value. The largest stablecoin, USDT, is pegged to the value of one US dollar, with its issuer required to fully back issued tokens with reserves. Under the new regulation, licensed Georgian companies will be allowed to issue stablecoins, provided they fully reserve all funds received from users.

Once in force, the issuance of stablecoins in Georgia will require prior written consent from the National Bank, and providers must register as virtual asset service providers. The framework covers lari-pegged, foreign currency-pegged, and asset-backed stablecoins. In all cases, full (100%) collateralization is required, with reserve assets clearly separated from those of the issuer.

Issuers must maintain a minimum regulatory capital of GEL 500,000, rising with reserve volumes to a maximum of GEL 50 million. Those with reserves exceeding GEL 15 million will also be required to establish a supervisory board.

₾932 million tender announced for Tbilisi bypass road

In March, a ₾932 million tender was announced for the construction of a new bypass road in Tbilisi. According to the plans, the four-lane highway will include complex engineering structures, including 16 bridges, four parallel tunnels, and four transport interchanges. The route will begin at the Avchala railway bridge, extend southeast, and end near the entrance to Didi Lilo, at the Lilo market.

In total, the Tbilisi Bypass will span a total of 49 kilometers and is divided into four sections. It forms part of the East–West International Highway (E60), a key transit corridor.

The project is expected to reduce congestion in the capital and improve connectivity, particularly for transit traffic, while supporting broader efforts to strengthen Georgia’s transport infrastructure and its role as a regional logistics hub.

Geostat breaks down Georgia’s 2025 growth by sector

In March, Geostat published a preliminary estimate of economic growth for 2025, showing that Georgia’s economy expanded by 7.5% over the year. At current prices, GDP reached 104.6 billion GEL (equivalent to $38.1 billion), while GDP per capita exceeded $10,000 for the first time, reaching $10,296.

By sector, the strongest growth was recorded in information, communication, and IT, which expanded by 28.7%. In absolute terms, however, the sector’s output totaled 7.37 billion GEL, placing it fourth overall. The education sector ranked second in growth terms, increasing by 24.5%, followed by financial services, which grew by 12.9%.

At the same time, several sectors recorded declines, including mining (-3%), agriculture (-5.7%), and energy (-4.5%).

TBC Capital hosts international conference with global banks

TBC Capital, with the support of the National Bank of Georgia, hosted its second international capital markets conference in March, bringing together approximately 500 participants from Georgia and across the region.

Representatives from leading global financial institutions attended the event, including JP Morgan, Citi, Morgan Stanley, ICBC Standard Bank, Oppenheimer, Ashmore, Aberdeen, Vontobel, MetLife Investment Management, EBRD, ADB, IFC, Fitch Ratings, S&P Global, Baker McKenzie, and Latham & Watkins.

Held in an expanded format this year, the conference focused on global and regional trends as well as investment opportunities. Particular attention was given to Georgia and Uzbekistan. Participants reviewed the Georgian capital market, which has tripled in size over the past four years to reach 3 billion GEL, and discussed Uzbekistan’s ongoing economic transformation and emerging investment potential.

The event also included one-on-one meetings between participants, international banks, and institutional investors, supporting further development of regional capital markets and strengthening Georgia’s investment potential.

Average wages rise 11% in Q4 2025

In March, Geostat published data on average salaries in Georgia for the fourth quarter of 2025. The average gross monthly salary reached 2,466 GEL, an increase of 249 GEL, or 11% YoY.

By sector, the highest average gross salaries were recorded in information and communication (4,373.2 GEL, up 9.1% YoY), construction (3,938.9 GEL, up 17.2% YoY), financial and insurance activities (3,747.7 GEL, up 11% YoY), and mining and quarrying (3,386.5 GEL, up 31.8% YoY).