Fitch Ratings has affirmed Georgia’s Long-Term Issuer Default Ratings at ‘BB’ with a stable outlook, citing strong economic growth, moderate public debt and a sound banking sector.
The agency stated that Georgia’s economy continued to grow strongly in the first quarter of 2026, following average GDP growth of more than 8% over 2023-2025. Fitch forecasts growth to slow slightly to 6.5% this year, but still remain above the median for countries with similar ratings.
“Growth has been primarily driven by information and communication technologies and transport services,” the report states.
Fitch also highlighted Georgia’s “credible macro-fiscal policy framework” and noted that public debt remained below 35% of GDP in 2025, significantly lower than the 52% median for ‘BB’-rated countries.
The agency said the budget deficit stood at 1.4% of GDP in 2025, below the 3% ceiling set by Georgia’s fiscal rules. Fitch expects deficits to remain below that threshold in 2026 and 2027.
At the same time, Fitch pointed to several risks facing the country, including political polarization, external vulnerabilities and high dollarization levels.
“Underlying domestic political tensions remain high following the 2024 disputed parliamentary elections,” Fitch stated, while noting that the intensity of protests has declined.
The report also referred to growing social divisions following the adoption of the ‘foreign influence transparency’ law in 2024.
Inflation rose to 5.9% in April 2026, mainly due to higher energy prices. In response, the National Bank of Georgia raised its policy rate by 25 basis points to 8.25% earlier this month.
Fitch said Georgia’s banking sector remains strong and profitable, with non-performing loans at 2.5% and return on equity at 22.8% as of March 2026.
The agency also noted improvements in Georgia’s external position. The current account deficit narrowed to 2.6% of GDP in 2025, compared to 5.3% in 2024, while international reserves increased to $6.5 billion in April 2026.
However, Fitch warned that Georgia still faces external finance risks due to relatively low reserve coverage, high net external debt and foreign currency exposure.
The report added that Georgia’s relations with the EU have deteriorated and no significant improvement is expected in the near future, although the country formally remains an EU candidate state.
Fitch said factors that could negatively affect Georgia’s rating include a sharp decline in international reserves or worsening political and geopolitical risks affecting economic growth and financial stability.
