FISCAL DEFICIT
- Danger threshold
- -4.00%
- Desired threshold
- -2.00%
- Current level
- -1.22% (2025)
The budget balance stood at -1.22% of GDP in 2025, inside the -2.00% level this framework treats as comfortable and a long way from the -4.00% reading that would signal strain. Public finances therefore place no constraint on the rest of the profile: the financing requirement arising from the budget is small relative to the size of the economy. This is the least demanding section of the profile to interpret, and the one least likely to shift in the near term. On this measure the fiscal position is not a source of country risk.
FDI / GDP
- Danger threshold
- 2.00%
- Desired threshold
- 5.00%
- Current level
- 4.40% (2025)
Foreign direct investment was 4.40% of GDP in 2025, short of the 5.00% level treated here as desirable but well clear of the 2.00% danger line. That places the reading in the intermediate band: inflows are substantial without being at a level that settles the question. The figure says less on its own than in relation to the external deficit it helps fund, which the next section sets out. A drift back toward 2.00% would be the signal to watch, rather than the current shortfall against 5.00%.
FDI SHARE OF CURRENT ACCOUNT DEFICIT
- Danger threshold
- 50.00%
- Desired threshold
- 100.00%
- Current level
- 169.97% (2025)
Foreign direct investment was equivalent to 169.97% of the current account deficit in 2025, above the 100.00% level at which inflows fully cover the deficit and far from the 50.00% mark that would count as dangerous. In practice the external gap was more than met by equity-type inflows rather than by borrowing that has to be refinanced. This is the strongest reading in the external block, and it tempers the liquidity result set out below. It is also sensitive to the size of the deficit itself: a wider current account would pull the share down even with investment unchanged.
CURRENCY STABILITY
- Danger threshold
- 15.00%
- Desired threshold
- 5.00%
- Current level
- 3.40% (2025)
The size of the annual swing in the real effective exchange rate was 3.40% in 2025, inside the 5.00% band treated here as stable and far from the 15.00% level that would count as disruptive. The indicator measures magnitude, not direction: it says the real value of the lari was predictable across the year, not that it moved in a way that favoured importers or exporters. For firms writing multi-year contracts, that predictability is the practical content of the reading. Currency stability is not currently adding to the risk profile.
ECONOMIC GROWTH
- Danger threshold
- 4.00%
- Desired threshold
- 6.00%
- Current level
- 8.95% (Q1 2026)
Real GDP grew 8.95% in the first quarter of 2026 against the same quarter a year earlier, above the 6.00% level treated here as strong and well above the 4.00% floor below which growth becomes a risk factor in its own right. Quarterly national accounts for 2026 are provisional and are routinely revised, so the figure should be read as indicative of direction rather than as settled. Quarterly growth is also the most volatile series in this profile, and a single strong quarter does not establish a trend. On the data available it is the clearest positive reading in the profile.
BANKING SECTOR HEALTH
- Danger threshold
- 5.00%
- Desired threshold
- 2.00%
- Current level
- 2.54% (2025)
Non-performing loans were 2.54% of the loan portfolio in 2025, above the 2.00% level treated as clean but well below the 5.00% threshold at which asset quality becomes a systemic concern. Banking sector health therefore sits in the intermediate band: loan books are performing, without the margin the framework would like to see. The reading carries more weight alongside the liquidity result below, since external funding conditions tend to become visible in the banking system first. For now the ratio is a monitoring item rather than a constraint.
COMPETITIVENESS
- Danger threshold
- -4.00%
- Desired threshold
- -1.00%
- Current level
- -1.82% (Q1 2026)
The current account balance was -1.82% of GDP on a trailing four-quarter basis to the first quarter of 2026, between the -1.00% level treated as desirable and the -4.00% line that would count as dangerous. The deficit is modest by the standards of this framework and, as the investment section shows, was more than covered by direct investment inflows in 2025. The intermediate reading reflects the distance to -1.00% rather than any sign of stress in the external accounts. What would change it is a widening deficit at a time when reserve cover is already thin.
LIQUIDITY
- Danger threshold
- 1.00
- Desired threshold
- 2.00
- Current level
- 0.84 (Q1 2026)
Reserve assets covered 0.84 times short-term external debt in the first quarter of 2026, below the 1.00 level at which reserves fully match the debt falling due within a year, and well short of the 2.00 cover treated here as comfortable. This is the only section of the profile at the danger level, and it is the reason the overall assessment is not stronger. In practical terms it means short-term external liabilities are met by rolling them over rather than out of reserves. Read alongside investment cover of the current account deficit, the near-term financing picture is less fragile than the ratio alone implies, but the buffer is thin and belongs at the top of any watch list.
EXTERNAL DEBT
- Danger threshold
- 50.00%
- Desired threshold
- 25.00%
- Current level
- 31.75% (Q1 2026)
Net external debt was 31.75% of GDP in the first quarter of 2026, between the 25.00% level treated as desirable and the 50.00% line that would signal danger. The stock itself is manageable; what this profile exposes is its maturity structure rather than its size, as the liquidity section shows. A stable ratio at this level alongside growth of 8.95% would imply the debt stock is not outrunning the economy, though one quarter cannot establish that. The section is intermediate on level and unresolved on composition.
Risk profile conclusion
Georgia's risk profile reads as strong on flows and thin on buffers. Growth of 8.95% in the first quarter of 2026, a budget deficit of 1.22% of GDP and a real exchange rate swing of 3.40% in 2025 describe an economy expanding quickly with a stable currency and undemanding public finances, while foreign direct investment equal to 169.97% of the current account deficit means the external gap was met by equity rather than by debt that has to be refinanced. Against that, reserves at 0.84 times short-term external debt sit below the level at which a year of maturities could be met from own resources, and the intermediate readings on investment, loan quality, the current account and net external debt of 31.75% of GDP leave no section with obvious capacity to absorb a shock. The practical conclusion is that country risk is currently low for as long as external funding remains available on present terms, and that the liquidity ratio, not growth or the budget, is the series to track between now and the next profile.