"Economic growth moderated in the second half of the year, in line with our normalization scenario. At the same time, the third quarter GDP came in rather strong, as growth accelerated QoQ, per our estimates. We forecast growth to average 7.4% in 2025 and decelerate slightly below trend at 4.5% in 2026, taking into account the higher probability of the conflict resolution in Ukraine in our view, the single most important variable for the outlook" - TBC Capital review reads.
The third quarter of 2025 posted a second consecutive current account surplus, excluding reinvestments only the third time on record in seasonally adjusted terms, the other one immediately following the start of the Russia-Ukraine war in 3Q22. Consequently, the underlying current account was in surplus in Jan-Sep 25 and, based on our real-time estimates, is expected to remain in surplus in the fourth quarter, with Georgia therefore turning into a net creditor to the rest of the world in 2025. The headline deficit is projected to total -2.7% of GDP, lowest on record. Growing service exports particularly, ICT services and sluggish imports have been driving the current account improvement, also aided by rising money transfers and tourism revenues.
