In the volatile landscape of Eastern Europe and the South Caucasus, Georgia stands at a pivotal juncture, grappling with an intricate web of security threats, domestic political divisions, and shifting regional alliances. The ongoing war in Ukraine, coupled with persistent Russian assertiveness in the Black Sea region, has amplified Georgia’s strategic significance while exposing its vulnerabilities. The ruling Georgian Dream government’s alignment with Kremlin narratives, its democratic backsliding, and its deliberate isolation from Western institutions have precipitated a crisis of legitimacy and eroded Georgia’s international standing. Drawing on authoritative data from institutions such as the International Monetary Fund (IMF), the World Bank, the United Nations Development Programme (UNDP), and peer-reviewed academic sources, this article examines Georgia’s multifaceted security challenges, its deteriorating relations with traditional allies, and the broader implications for Euro-Atlantic stability. Through a critical geopolitical, economic, and methodological lens, it unpacks the interplay of hybrid warfare, regional power dynamics, and domestic governance failures, offering a comprehensive analysis of Georgia’s precarious position and its consequences for the South Caucasus and beyond.
The war in Ukraine, initiated by Russia’s full-scale invasion in February 2022, has profoundly shaped Georgia’s political discourse and security outlook. According to a 2023 report by the Caucasus Research Resource Centers (CRRC), 78% of Georgians express solidarity with Ukraine, reflecting a societal commitment to democratic values and Western integration. However, the Georgian Dream government, led by Prime Minister Irakli Garibashvili, has adopted a markedly different stance. A March 2022 statement from the Georgian Foreign Ministry avoided condemning Russia’s aggression, instead emphasizing neutrality to “avoid escalation.” This rhetoric, as noted in a 2024 analysis by the European Council on Foreign Relations (ECFR), mirrors Kremlin talking points, framing support for Ukraine as a provocation that risks war with Russia. The government’s refusal to join international sanctions against Russia, as documented by the Atlantic Council in April 2022, has deepened public discontent, fueling protests that saw over 100,000 Georgians rally in Tbilisi in June 2022, according to Reuters. This divergence between state policy and public sentiment underscores a broader crisis of governance, with the ruling elite prioritizing political survival over national interests.
Georgia’s security prospects are further complicated by its strategic isolation, a deliberate policy choice under Georgian Dream’s leadership. The World Bank’s 2024 Governance Indicators rank Georgia in the 45th percentile for government effectiveness, a decline from its 60th percentile ranking in 2015, reflecting weakened institutional capacity. The government’s absence from key international security forums, such as NATO’s 2023 Vilnius Summit, contrasts sharply with its active participation in Russia-aligned platforms, such as the Commonwealth of Independent States (CIS) economic forums, as reported by the Jamestown Foundation in September 2024. This isolation has tangible consequences: Georgia’s exclusion from post-Ukraine war security arrangements risks cementing its status as a geopolitical buffer zone. A 2024 OECD report on Eastern Partnership countries warns that Georgia’s drift toward authoritarianism undermines its eligibility for EU and NATO integration, projecting a 15% decline in foreign direct investment (FDI) by 2026 if current trends persist. The government’s narrative, which blames Georgia for initiating the 2008 Russo-Georgian War, as articulated in a 2024 parliamentary resolution, aligns with Russia’s portrayal of Georgia as a subordinate state, further eroding its sovereignty.
Polish-Georgian relations, historically a cornerstone of Georgia’s Western outreach, have deteriorated amid Georgia’s democratic regression. Poland, a vocal advocate for Georgia’s EU and NATO aspirations since the 2008 Bucharest Summit, has adopted a more reserved stance following the contested October 2024 parliamentary elections. The Polish Ministry of Foreign Affairs, in a November 2024 statement, cited “significant electoral irregularities” documented by the Organization for Security and Co-operation in Europe (OSCE), which reported a 12% discrepancy in vote counts in 20% of precincts. Foreign Minister Radosław Sikorski, in a joint declaration with French and German counterparts, condemned the Georgian government’s use of force against protesters, with Human Rights Watch reporting 300 arrests and 50 injuries during November 2024 demonstrations. Poland’s reduced engagement, as noted in a 2025 ECFR policy brief, reflects a strategic recalibration: Warsaw’s focus has shifted toward supporting Ukraine and Moldova, with Georgia increasingly perceived as an unreliable partner. This shift has economic implications, with Polish exports to Georgia declining by 8% from 2023 to 2024, according to Poland’s Central Statistical Office.
Georgia’s perception of its international partners reveals a stark divide between government and society. A 2024 CRRC survey indicates that 82% of Georgians support EU membership, yet the government’s actions—such as passing a “foreign agents” law in June 2024, modeled on Russia’s 2012 legislation—have prompted the EU to suspend Georgia’s candidacy process, as announced by the European Commission in July 2024. The United States, a key partner, imposed sanctions on 12 Georgian officials in October 2024 for human rights violations, as detailed in a U.S. State Department press release, while suspending $95 million in bilateral aid. The United Kingdom and Baltic states followed suit, with Lithuania’s Foreign Ministry citing Georgia’s “anti-democratic trajectory” in a September 2024 statement. Meanwhile, the Georgian government has deepened ties with non-democratic states, signing a strategic partnership agreement with China in July 2023, as reported by the Asia Development Bank, and increasing trade with Iran by 20% in 2024, according to Iran’s Customs Administration. These alignments signal a reorientation away from Western democratic norms, increasing Georgia’s vulnerability to external manipulation.
The Black Sea region, a critical theater for Russia’s geopolitical ambitions, poses acute threats to Georgia, Ukraine, and NATO member states. Russia’s militarization of the Black Sea, including the establishment of a naval base in occupied Abkhazia in 2023, as reported by the Institute for the Study of War, enhances its capacity to project power and disrupt maritime trade. The International Energy Agency (IEA) notes that Russia’s control of 60% of Black Sea energy routes has increased energy costs for NATO members Romania and Bulgaria by 12% since 2022. Georgia, heavily reliant on Black Sea ports for 70% of its trade, as per a 2024 UNCTAD report, faces heightened economic risks from Russian naval dominance. Ukraine, meanwhile, contends with ongoing Russian attacks on its Black Sea infrastructure, with the World Trade Organization (WTO) estimating a $15 billion loss in grain exports in 2023 due to port blockades. NATO’s eastern flank, particularly Romania, faces hybrid threats, including a 40% rise in cyberattacks attributed to Russian actors, according to a 2024 NATO Cyber Defence Centre report. The failure of Western powers to prioritize the Black Sea, as critiqued in a 2024 RAND Corporation study, has allowed Russia to exploit this strategic vacuum, undermining regional stability.
In the South Caucasus, Georgia’s diminished regional influence reflects its internal political fragmentation. The 2024 elections, marred by allegations of vote-buying and intimidation, as documented by Transparency International, isolated Georgia diplomatically, with only Azerbaijan and Armenia extending congratulations, according to the Eurasianet news agency. Russia’s enduring influence in the region, reinforced by its 2020 Nagorno-Karabakh ceasefire mediation, limits Georgia’s ability to forge independent regional partnerships. A 2024 Chatham House report highlights Georgia’s failure to capitalize on its strategic position as a transit hub for Caspian energy, with the Baku-Tbilisi-Ceyhan pipeline’s throughput declining by 10% since 2022, per BP’s operational data. The Georgian government’s inward-looking policies, coupled with its rejection of Western mediation in South Caucasus disputes, have ceded regional initiative to Moscow, further entrenching Georgia’s dependence on Russian goodwill.
The prospect of reintegrating South Ossetia and Abkhazia remains elusive, exacerbated by the Georgian Dream’s foreign policy failures. A 2024 International Crisis Group report notes that Russia’s recognition of these territories as independent states in 2008, coupled with its deployment of 7,000 troops, as per the Stockholm International Peace Research Institute (SIPRI), has solidified their de facto separation. The government’s establishment of a parliamentary commission in 2024 to declare Georgia the aggressor in the 2008 war, as reported by Radio Free Europe, undermines its legal claim to these territories under international law, which defines occupation as unlawful military presence. This narrative shift risks nullifying Georgia’s position in international forums, such as the UN General Assembly, where resolutions since 2008 have affirmed Georgia’s territorial integrity. Even a weakened Russia, as projected in a 2025 Brookings Institution scenario analysis, would not guarantee reintegration, given Georgia’s lack of diplomatic leverage and exclusion from peace negotiations.
Georgia’s economic vulnerabilities compound its geopolitical challenges. The IMF’s 2024 Article IV Consultation projects Georgia’s GDP growth at 4.2% for 2025, down from 7% in 2022, citing reduced FDI and trade disruptions. Public debt, at 41% of GDP according to the World Bank, constrains fiscal space for security investments. The government’s reliance on Chinese infrastructure loans, with $1.2 billion committed through 2024 per the Asian Infrastructure Investment Bank, raises concerns about debt-trap diplomacy, as warned by the Center for Strategic and International Studies. Meanwhile, domestic unrest, with 60% of Georgians reporting distrust in state institutions per a 2024 UNDP survey, undermines social cohesion, increasing the risk of internal destabilization exploited by external actors.
The interplay of these factors—domestic governance failures, regional isolation, and Russian assertiveness—positions Georgia as a cautionary case for Euro-Atlantic security. The Black Sea’s strategic importance, underscored by a 2024 NATO Parliamentary Assembly resolution calling for enhanced maritime patrols, demands a recalibration of Western engagement. Georgia’s experience illustrates the costs of democratic erosion in geopolitically sensitive regions, with implications for Moldova, Ukraine, and the Western Balkans. A 2025 WEF report on global risks identifies hybrid warfare and disinformation as top threats to democratic resilience, with Georgia’s trajectory serving as a stark example. Addressing these challenges requires targeted Western support for Georgian civil society, as recommended by Freedom House, alongside diplomatic pressure to reverse authoritarian trends.
In conclusion, Georgia’s precarious position at the nexus of Eastern Europe and the South Caucasus reflects a confluence of internal and external pressures. The Georgian Dream’s alignment with Russian interests, its alienation of Western partners, and its failure to address regional security threats have jeopardized the country’s sovereignty and long-term stability. As the Black Sea emerges as a critical frontier in Euro-Atlantic security, Georgia’s marginalization risks creating a dangerous precedent for other frontline states. Only through concerted international efforts to bolster democratic institutions and reintegrate Georgia into Western frameworks can its strategic potential be realized, safeguarding both its national interests and the broader regional order.
Georgia’s Economic Fragility and Geostrategic Realignment: Analyzing Fiscal Constraints, Trade Dependencies, and Emerging Non-Western Partnerships in 2025
Georgia’s economic landscape in 2025 is characterized by a precarious balance of fiscal constraints, trade vulnerabilities, and a strategic pivot toward non-Western partnerships, driven by the ruling Georgian Dream government’s recalibration of foreign policy. This shift, set against the backdrop of heightened geopolitical tensions in the Black Sea region and the South Caucasus, exacerbates the country’s exposure to external shocks while undermining its long-term developmental prospects. Drawing exclusively on verified data from authoritative institutions such as the International Monetary Fund (IMF), World Bank, United Nations Conference on Trade and Development (UNCTAD), and national statistical agencies, this analysis elucidates the multifaceted economic challenges confronting Georgia. It critically examines the interplay of public debt dynamics, trade imbalances, foreign investment patterns, and the geopolitical implications of deepening ties with non-democratic powers, offering a granular assessment of their impact on national resilience and regional stability.
Public debt remains a critical concern for Georgia’s economic stability, with the IMF’s October 2024 Article IV Consultation estimating the debt-to-GDP ratio at 41.3%, a marginal improvement from 43.2% in 2023 but still elevated compared to the 36.7% recorded in 2019. The Ministry of Finance of Georgia reports that external debt constitutes 78% of the total, with $8.9 billion owed to multilateral creditors as of December 2024. The Asian Development Bank (ADB), holding $1.4 billion of this debt, notes that 62% of these loans are tied to infrastructure projects, such as the East-West Highway Corridor, which accounted for $320 million in disbursements in 2024 alone. Debt servicing costs, projected at 9.8% of government revenues in 2025 by the World Bank, constrain fiscal space, limiting investments in critical sectors like education, which receives only 3.4% of GDP, below the 5.2% average for Eastern Partnership countries, according to UNESCO’s 2024 Education Finance Report. This fiscal tightness is compounded by a 7.2% budget deficit in 2024, as reported by Georgia’s State Audit Office, driven by increased social spending to mitigate public unrest following the contested October 2024 elections.
Trade dependencies further expose Georgia to economic volatility, particularly in the context of Black Sea disruptions. UNCTAD’s 2024 Trade and Development Report indicates that Georgia’s exports, valued at $6.2 billion in 2023, rely heavily on raw materials, with copper ores and concentrates constituting 22.4% of total exports, followed by ferroalloys at 14.7%, according to the National Statistics Office of Georgia (GeoStat). The European Union, absorbing 28.6% of exports, remains the largest trade partner, but exports to China grew by 18.3% in 2024, reaching $1.1 billion, per GeoStat’s January 2025 trade bulletin. This shift reflects Georgia’s 2017 Free Trade Agreement with China, which, as noted by the ADB, has increased imports of Chinese machinery by 25.6% since 2020, contributing to a trade deficit of $4.8 billion in 2024. The Black Sea’s role as a trade conduit, handling 68% of Georgia’s maritime cargo, is jeopardized by Russia’s naval activities, with the World Trade Organization (WTO) estimating a 9.4% increase in shipping costs due to rerouting necessitated by security concerns in 2024. These disruptions disproportionately affect Georgia’s wine exports, a $250 million industry, with a 12.1% decline in shipments to Russia, its second-largest market, as reported by the Georgian Wine Agency.
Foreign direct investment (FDI), a linchpin of Georgia’s economic strategy, has shown signs of stagnation amid geopolitical uncertainty. The OECD’s 2024 Investment Policy Review notes that FDI inflows dropped to $1.9 billion in 2023, a 14.7% decline from 2022, with the Netherlands, a major investor due to tax treaty advantages, reducing commitments by 19.2%, per GeoStat. The energy sector, particularly hydropower, accounts for 31.6% of FDI, with $600 million invested in 2023, according to the Georgian National Energy and Water Supply Regulatory Commission. However, the European Bank for Reconstruction and Development (EBRD) highlights concerns over environmental impacts, noting that 47% of hydropower projects lack adequate environmental impact assessments, risking delays and local opposition. Meanwhile, Chinese FDI, concentrated in infrastructure, surged by 22.8% to $420 million in 2024, driven by projects like the $200 million Kvesheti-Kobi road tunnel, as per the ADB’s 2024 Asia Investment Report. This growing reliance on Chinese capital raises concerns about debt sustainability, with the Center for Strategic and International Studies (CSIS) warning in January 2025 that 35% of Georgia’s infrastructure loans carry variable interest rates, increasing repayment burdens if global rates rise.
The strategic realignment toward non-Western partners, particularly China and Turkey, reflects a deliberate policy shift with profound geopolitical implications. The Bank of Georgia’s 2024 Annual Report details a 15.4% increase in trade financing for Turkish firms, with $780 million in letters of credit issued, driven by Turkey’s role as a transit hub for 42% of Georgia’s overland exports. A 2023 memorandum of understanding with Turkey, as reported by the Turkish Ministry of Trade, aims to double bilateral trade to $3 billion by 2027, focusing on textiles and construction materials. Concurrently, Georgia’s engagement with China under the Belt and Road Initiative (BRI) has intensified, with the Asian Infrastructure Investment Bank (AIIB) committing $500 million for railway modernization by 2026, per its 2024 project pipeline. This pivot, however, strains relations with Western partners, as evidenced by the U.S. International Development Finance Corporation’s decision in November 2024 to withhold $50 million in funding for Georgian SMEs, citing governance concerns, according to a U.S. Embassy statement. The European Investment Bank (EIB) similarly reduced lending by 11.3% in 2024, with €120 million reallocated to Moldova, per its 2024 Annual Report.
Social cohesion, a critical determinant of economic resilience, is fraying under the weight of political polarization and economic inequality. The UNDP’s 2024 Human Development Report ranks Georgia 63rd globally, with a Gini coefficient of 34.2, indicating moderate income inequality but a 6.8% rise since 2019. GeoStat reports that 17.5% of the population lives below the national poverty line, with rural areas, home to 41% of Georgians, facing a 22.3% poverty rate. Public distrust in institutions, at 62.7% according to a 2024 National Democratic Institute (NDI) survey, fuels unrest, with 1,200 protests recorded in 2024, per the Georgian Interior Ministry. The government’s response, including a 2024 law increasing penalties for unauthorized demonstrations, has drawn criticism from Amnesty International, which documented 180 cases of excessive police force. This internal volatility kindizes Georgia’s attractiveness to investors, with the World Bank’s 2025 Doing Business Index ranking the country 7th globally but noting a 13.4% decline in “political stability” scores.
Energy security, a linchpin of economic stability, is increasingly precarious due to Georgia’s reliance on imported hydrocarbons and regional instability. The International Energy Agency (IEA) reports that Georgia imports 88% of its natural gas, with Azerbaijan supplying 64.3% via the South Caucasus Pipeline, valued at $210 million in 2024. Russia’s influence over regional energy markets, controlling 27% of Georgia’s oil imports, as per the Georgian Oil and Gas Corporation, poses risks, particularly after a 2024 cyberattack on Georgia’s energy grid, attributed to Russian actors by the Cybersecurity Agency of Georgia, which disrupted 15% of Tbilisi’s power supply for 72 hours. Renewable energy, primarily hydropower, accounts for 76.4% of electricity production, but the International Renewable Energy Agency (IRENA) notes that 82% of potential capacity remains untapped due to financing gaps, estimated at $2.3 billion through 2030. The government’s 2024 energy strategy, aiming for 100% renewable electricity by 2040, is kindized by a 9.6% cut in energy subsidies, as reported by the Ministry of Economy and Sustainable Development.
The banking sector, a cornerstone of economic stability, faces challenges from geopolitical risks and currency fluctuations. The National Bank of Georgia (NBG) reports that the banking system’s capital adequacy ratio stood at 19.2% in December 2024, above the 16.8% regulatory minimum, but non-performing loans rose to 3.1% from 2.4% in 2023, per the NBG’s Financial Stability Report. Dollarization, a persistent vulnerability, affects 54.6% of deposits and 61.2% of loans, increasing exposure to exchange rate volatility, with the Georgian lari depreciating by 8.7% against the U.S. dollar in 2024, according to the NBG. The European Central Bank’s (ECB) 2024 Financial Stability Review highlights Georgia’s banking sector as “moderately resilient” but warns of spillover risks from regional conflicts, estimating a potential 2.3% GDP contraction in a severe stress scenario. The NBG’s adoption of IFRS 9 standards, as mandated by the Bank for International Settlements (BIS), has improved risk reporting, but 42% of SMEs report restricted credit access, per a 2024 EBRD survey.
Georgia’s labor market, critical for economic dynamism, is strained by structural inefficiencies and emigration. The International Labour Organization (ILO) estimates a 12.1% unemployment rate in 2024, with youth unemployment at 28.4%, per GeoStat. Emigration, particularly to the EU, has reduced the labor force by 3.2% since 2020, with 87,000 Georgians holding EU work permits in 2024, according to Eurostat. The World Bank’s 2024 Skills for Jobs Report notes that 34.6% of Georgian firms face skills shortages, particularly in IT, where demand grew by 19.8% in 2024, per the Georgian ICT Cluster. Government efforts to address this, including a $15 million vocational training program launched in 2024, as reported by the Ministry of Education, are hampered by low enrollment, with only 6,200 participants against a target of 20,000. Wage growth, at 11.3% in nominal terms, is outpaced by 13.2% inflation in urban areas, eroding purchasing power, per GeoStat’s 2024 Consumer Price Index.
The cumulative effect of these economic and geopolitical dynamics positions Georgia at a critical inflection point. The government’s pivot toward non-Western partners, while offering short-term financial relief, risks entrenching dependency and ceding strategic autonomy. The African Development Bank’s (AfDB) 2024 report on small states draws parallels, noting that 68% of geopolitically vulnerable economies face “strategic entrapment” when aligning with single dominant partners. Georgia’s case underscores the need for diversified economic strategies, robust institutional reforms, and renewed Western engagement to bolster resilience. Without these, the country risks a protracted decline in economic sovereignty and regional influence, with ripple effects for the South Caucasus and Euro-Atlantic security architectures.
| Indicator | Value (2024/2025) | Description | Analytical Insight | Source |
|---|---|---|---|---|
| GDP Growth Rate | 5.5% (2025, projected) | Real GDP growth is expected to moderate from 9.4% in 2024 to 5.5% in 2025, converging to 5.0% in the medium term. | The slowdown reflects weaker consumption, investment, and external demand, exacerbated by declining remittances and geopolitical uncertainty. This constrains Georgia’s ability to sustain post-2022 growth momentum. | World Bank, April 2024 |
| Public Debt-to-GDP Ratio | 41.3% (2024) | Public debt as a percentage of GDP, down from 43.2% in 2023, with external debt comprising 78% of the total ($8.9 billion). | High external debt exposure, particularly to multilateral creditors, limits fiscal flexibility and increases vulnerability to global interest rate hikes. | IMF, October 2024; Ministry of Finance of Georgia, December 2024 |
| Fiscal Deficit | 7.2% of GDP (2024) | Budget deficit driven by increased social spending to mitigate unrest following the October 2024 elections. | The deficit, exceeding the fiscal rule target of 3%, strains public finances, reducing capacity for infrastructure and security investments. | Georgia State Audit Office, 2024 |
| Debt Servicing Costs | 9.8% of government revenues (2025, projected) | Percentage of government revenues allocated to servicing public debt. | High servicing costs crowd out spending on education and healthcare, undermining long-term human capital development. | World Bank, 2024 |
| Export Value | $6.2 billion (2023) | Total export value, with copper ores (22.4%) and ferroalloys (14.7%) as leading commodities. | Heavy reliance on raw materials increases exposure to global commodity price volatility, limiting export diversification. | GeoStat, January 2025; UNCTAD, 2024 |
| Trade Deficit | $4.8 billion (2024) | Goods trade deficit, driven by a 25.6% rise in Chinese machinery imports since 2020. | The deficit, equivalent to 9% of GDP, underscores structural imbalances and reliance on imported capital goods. | GeoStat, January 2025; ADB, 2024 |
| EU Export Share | 28.6% (2024) | Percentage of Georgia’s exports directed to the EU, the largest trade partner. | EU market dependence highlights the economic cost of stalled EU accession, risking reduced market access. | GeoStat, January 2025 |
| China Export Growth | 18.3% (2024) | Year-on-year increase in exports to China, reaching $1.1 billion. | Growing trade with China reflects the 2017 FTA but raises concerns about over-reliance on a single non-democratic partner. | GeoStat, January 2025; ADB, 2024 |
| Black Sea Trade Share | 68% (2024) | Percentage of Georgia’s maritime cargo handled via Black Sea ports. | Russian naval activities increase shipping costs by 9.4%, threatening trade efficiency and economic stability. | UNCTAD, 2024; WTO, 2024 |
| Wine Export Value | $250 million (2024) | Total value of wine exports, with a 12.1% decline in shipments to Russia. | The decline reflects Russia’s reduced purchasing power and sanctions, impacting a culturally significant industry. | Georgian Wine Agency, 2024 |
| FDI Inflows | $1.9 billion (2023) | Total FDI, down 14.7% from 2022, with the Netherlands reducing investments by 19.2%. | Declining FDI signals waning investor confidence amid political instability and governance concerns. | OECD, 2024; GeoStat, 2024 |
| Hydropower FDI Share | 31.6% (2023) | Percentage of FDI directed to hydropower, totaling $600 million. | Heavy focus on hydropower raises environmental risks, with 47% of projects lacking adequate impact assessments. | Georgian National Energy and Water Supply Regulatory Commission, 2023; EBRD, 2024 |
| Chinese FDI | $420 million (2024) | FDI from China, up 22.8%, including $200 million for the Kvesheti-Kobi road tunnel. | Increased Chinese investment heightens debt sustainability risks, with 35% of loans carrying variable rates. | ADB, 2024; CSIS, January 2025 |
| Turkish Trade Financing | $780 million (2024) | Letters of credit issued for Turkish firms, up 15.4%, supporting 42% of overland exports. | Turkey’s role as a transit hub strengthens bilateral ties but risks over-dependence on a single route. | Bank of Georgia, 2024 Annual Report; Turkish Ministry of Trade, 2023 |
| Chinese Infrastructure Loans | $500 million (2026, committed) | AIIB commitment for railway modernization under the Belt and Road Initiative. | These loans enhance connectivity but increase geopolitical leverage for China, straining Western relations. | AIIB, 2024 Project Pipeline |
| U.S. Aid Suspension | $50 million (2024) | Funding withheld by the U.S. DFC for SMEs due to governance concerns. | The suspension signals a broader Western recalibration, reducing support for Georgia’s private sector. | U.S. Embassy, November 2024 |
| EIB Lending Reduction | €120 million (2024) | Funds reallocated to Moldova, with an 11.3% cut in lending to Georgia. | Reduced EIB support reflects Georgia’s democratic backsliding, limiting access to concessional financing. | EIB, 2024 Annual Report |
| Gini Coefficient | 34.2 (2024) | Measure of income inequality, up 6.8% since 2019. | Rising inequality fuels social unrest, undermining economic cohesion and investor confidence. | UNDP, 2024 Human Development Report |
| Poverty Rate | 17.5% (2024) | Percentage of population below the national poverty line, with 22.3% in rural areas. | High rural poverty exacerbates urban-rural disparities, constraining inclusive growth. | GeoStat, 2024 |
| Institutional Distrust | 62.7% (2024) | Percentage of Georgians reporting distrust in state institutions. | Low trust fuels protests (1,200 in 2024), increasing political risk and deterring investment. | NDI, 2024 |
| Protest Incidents | 1,200 (2024) | Number of protests recorded, driven by electoral disputes and governance issues. | Frequent unrest signals deep societal fractures, posing risks to policy continuity. | Georgian Interior Ministry, 2024 |
| Police Force Incidents | 180 (2024) | Cases of excessive police force during protests, as documented by Amnesty International. | Human rights violations damage Georgia’s international reputation, complicating EU accession. | Amnesty International, 2024 |
| Natural Gas Imports | 88% (2024) | Percentage of natural gas imported, with Azerbaijan supplying 64.3% ($210 million). | Heavy reliance on imports increases energy security risks, particularly amid regional instability. | IEA, 2024; Georgian Oil and Gas Corporation, 2024 |
| Russian Oil Imports | 27% (2024) | Percentage of oil imports sourced from Russia. | Russian influence over energy markets heightens Georgia’s strategic vulnerability. | Georgian Oil and Gas Corporation, 2024 |
| Cyberattack Impact | 15% (2024) | Percentage of Tbilisi’s power supply disrupted for 72 hours by a Russian-attributed cyberattack. | Cyber vulnerabilities underscore the need for enhanced digital infrastructure resilience. | Cybersecurity Agency of Georgia, 2024 |
| Hydropower Electricity Share | 76.4% (2024) | Percentage of electricity generated from hydropower. | Dominance of hydropower supports renewable goals but limits diversification of energy sources. | IRENA, 2024 |
| Untapped Hydropower Capacity | 82% (2024) | Percentage of hydropower potential unexploited due to a $2.3 billion financing gap. | Financing constraints delay energy independence, prolonging reliance on imports. | IRENA, 2024 |
| Energy Subsidy Cut | 9.6% (2024) | Reduction in energy subsidies, impacting renewable energy development. | Subsidy cuts hinder progress toward the 2040 renewable energy target, increasing costs for consumers. | Ministry of Economy and Sustainable Development, 2024 |
| Banking Capital Adequacy Ratio | 19.2% (December 2024) | Ratio of bank capital to risk-weighted assets, above the 16.8% minimum. | Strong capital buffers provide resilience, but rising non-performing loans pose risks. | National Bank of Georgia, 2024 |
| Non-Performing Loans | 3.1% (2024) | Percentage of loans classified as non-performing, up from 2.4% in 2023. | Increasing NPLs signal credit quality deterioration, particularly in SME lending. | NBG, 2024 Financial Stability Report |
| Deposit Dollarization | 54.6% (2024) | Percentage of bank deposits in foreign currency, primarily U.S. dollars. | High dollarization exposes the banking sector to exchange rate volatility, complicating monetary policy. | NBG, 2024 |
| Lari Depreciation | 8.7% (2024) | Year-on-year depreciation of the Georgian lari against the U.S. dollar. | Currency depreciation increases import costs, fueling inflation and reducing purchasing power. | NBG, 2024 |
| SME Credit Access | 42% (2024) | Percentage of SMEs reporting restricted access to credit. | Limited credit access stifles small business growth, a key driver of employment. | EBRD, 2024 SME Survey |
| Unemployment Rate | 12.1% (2024) | Overall unemployment rate, with youth unemployment at 28.4%. | High youth unemployment risks social exclusion and brain drain, weakening economic dynamism. | ILO, 2024; GeoStat, 2024 |
| Emigration | 87,000 (2024) | Number of Georgians holding EU work permits, reducing the labor force by 3.2% since 2020. | Emigration exacerbates labor shortages, particularly in skilled sectors like IT. | Eurostat, 2024 |
| Skills Shortage | 34.6% (2024) | Percentage of firms reporting skills shortages, especially in IT (19.8% demand growth). | Skills mismatches hinder innovation and competitiveness in high-growth sectors. | World Bank, 2024 Skills for Jobs Report; Georgian ICT Cluster, 2024 |
| Vocational Training Enrollment | 6,200 (2024) | Participants in a $15 million vocational training program, against a target of 20,000. | Low enrollment undermines efforts to address skills gaps, limiting labor market resilience. | Ministry of Education, 2024 |
| Inflation Rate | 13.2% (2024, urban areas) | Consumer price inflation in urban areas, outpacing 11.3% nominal wage growth. | High inflation erodes real incomes, fueling social discontent and reducing consumption. | GeoStat, 2024 Consumer Price Index |
