Georgia’s Finance Minister Lasha Khutsishvili says the country is moving closer to an upgrade of its sovereign credit rating, using strong macroeconomic indicators and a recent Eurobond issuance as evidence of growing investor confidence.
Speaking on a podcast for Bank Cartu, Khutsishvili pointed to the Georgian government’s successful placement of $500 million in Eurobonds on the London Stock Exchange. The minister stated the bond issuance carried the lowest interest rate among sovereign bonds issued over the past four years by countries with similar or even slightly higher credit ratings.
“This automatically means it represented the lowest risk level,” Khutsishvili said, noting that several international financial institutions described the issuance as highly successful.
Georgia is currently rated below investment grade by all three major international agencies, S&P Global Ratings, Moody’s, and Fitch Ratings, placing the country in the speculative category.
However, Khutsishvili argued that internal rating models used by these agencies indicate a higher score than the published sovereign rating. He said:
- Fitch and Moody’s models suggest a rating two notches higher than the current assessment, effectively at investment-grade level.
- S&P’s model places Georgia one notch above its present rating.
The minister described the widening gap between the model-based assessments and the final published ratings as a sign of potential upward revision in the coming years.
Despite improvements in macroeconomic indicators over the past three to four years, Khutsishvili acknowledged that geopolitical risks remain the primary constraint on a rating upgrade. These risks, he said, are linked not only to Georgia’s region but to broader global instability, though their impact is more pronounced in the South Caucasus.
At the same time, he noted that certain risks previously flagged by rating agencies have not materialized, which could support future positive reassessments.
An upgrade to investment grade would have significant implications for Georgia’s economy. Sovereign ratings directly influence how international investors assess the country’s financial institutions and private sector.
“A higher country rating means a higher rating for the private sector, which ultimately translates into cheaper and more accessible financing for companies,” Khutsishvili said. This would enhance competitiveness for Georgian businesses and reduce borrowing costs for the state.
Earlier this month, S&P Global reaffirmed Georgia’s sovereign rating at ‘BB’ with a stable outlook, mentioning ongoing political polarization and increasingly complex relations with the United States and the European Union as potential risk factors. The agency warned that heightened political tensions that weaken investor confidence and weaken growth prospects could lead to a downgrade.
