Moody's Outlook Revision for Georgia

Moody's Investors Service revised the outlook on the Government of Georgia from negative to stable on 30 June 2026, while affirming the sovereign’s Ba2 domestic‑currency and foreign‑currency long‑term issuer ratings as well as its Ba2 senior unsecured foreign‑currency rating. The rating committee met on 25 June 2026 and highlighted that the balance of risks has returned to a stable footing, driven by a mix of positive and negative factors.

Economic Performance

Georgia’s real GDP expanded 7.8% year‑on‑year over the first five months of 2026, an acceleration from the 7.5% average growth recorded in 2025. Moody’s projects average growth of 6.4% in 2026 and 5.5% in 2027, incorporating the potential impact of the ongoing Middle‑East conflict.

Fiscal Discipline and Debt Reduction

Government debt as a share of GDP declined sharply, moving from nearly 60% in 2020 to around 34% in 2025. This reduction reflects strong nominal GDP growth coupled with disciplined fiscal policy, supported by continued cooperation with development partners and international financial institutions.

Geopolitical and Political Context

Moody’s notes that while domestic political polarization over foreign‑policy agendas and the delayed EU accession process remain, the likelihood that these factors will materially weaken Georgia’s economic and fiscal performance is now lower than previously assessed. The country remains vulnerable to geopolitical tensions with Russia, given its shared border and the presence of Russian‑occupied territories within Georgian borders.

Outlook Rationale

The stable outlook is underpinned by:

  • Robust economic growth mitigating risks from domestic and geopolitical challenges.
  • Ongoing progress in debt reduction and gradual improvements in the fiscal and debt profile.
  • Strength in investment inflows and GDP expansion, indicating that political challenges and the stalled EU accession process are not impairing the fundamental credit profile.

Rating Committee Commentary

During the 25 June 2026 rating committee discussion, members emphasized that the issuer’s economic fundamentals and fiscal strength have materially increased, justifying the shift to a stable outlook.