Unemployment remains chronically high despite reform efforts and continuous economic growth since the Georgian Dream Party came into power

The elections will serve as a pivotal test for Georgia’s EU membership aspirations, with the ruling party striving for a resounding victory

MNCs should anticipate the re-election of the ruling party and continuity of the state policies. While reforms aimed at EU accession, such as judiciary, anti-corruption, and de-oligarchization reforms, will persist, substantial progress, particularly in the judiciary, may be hindered by political interests. Nevertheless, Georgia will maintain its favorable standings in major international business indices, ranking ahead of all CIS countries in Transparency International’s latest Corruption Perception Index despite a three-point drop in the score.

Public tension eased considerably after the EU granted Georgia candidate status in late 2023, yet public protests are likely before and after the fall elections, depending on the outcome and the public’s perception of their fairness. MNCs should have contingency plans in place, though we anticipate that any potential disruptions would be temporary and minor in magnitude. In terms of geopolitical risks, renewal of the military hostilities in Abkhazia and South Ossetia are not likely in the near term.

With infrastructure spending remaining substantial, opportunities in port and railway logistics, green solutions, and renewable energy will continue to grow in 2024, presenting new B2G and B2B prospects.


  • Prime Minister Irakli Garibashvili stepped down on January 29 to assume leadership of the ruling party, the Georgian Dream Party. His resignation followed the formal return of Bidzina Ivanishvili, Georgia’s wealthiest man, former PM (2012–2013), and the party’s founder, to politics as the honorary chairman on December 30, 2023.
  • Irakli Kobakhidze, chairman of the ruling party, became Georgia’s seventh prime minister under the party’s leadership since 2012.
  • The new PM introduced his program, titled “Towards Building a European State,” to the Parliament on February 2. While similar in essence to the previous program, it places increased emphasis on cooperation with China, reflecting Georgia’s ambition to serve as an energy and transit hub between East and West.
  • The parliamentary elections are anticipated on October 26, 2024, empowering the party that secures the majority of seats to nominate the next PM.
  • 2024 will also see a new presidential election, for the first time elected by the Electoral College, comprising members of the parliament, legislative bodies from Abkhazia and Adjara, and nominees from political parties in local government bodies. According to the constitutional amendments adopted in 2017, direct presidential elections were abolished.

Our View

Despite occasional anti-Western rhetoric, growing pressures on civil society, and increasing economic ties with Russia, it is highly probable that the current ruling party will secure the majority of seats in the upcoming elections, ensuring minimal change in Georgia’s policy direction. The recent reshuffle did not come unexpected given Bidzina Ivanishvili’s formal return to the political arena. His personal and closer involvement in the preparations aim to secure a convincing victory in the forthcoming elections. Fair and popular victory is crucial to maintain favorable relations with European allies; otherwise, Georgia’s path to EU membership could be jeopardized.

In terms of foreign policy, Georgia will maintain its balanced approach toward both Russia and the EU despite all the challenges involved. At times, balance may tilt toward the Kremlin due to increasing trade, business, and energy ties and complex geopolitics, which will hurt its EU ambitions. Relations with China will continue to expand, driven by increasing interest from Chinese investors in the region, particularly as the significance of the Middle Corridor grows amid ongoing sanctions against Russia, complicating the broader use of the Northern Route. The current leadership of Georgia does not see any contradiction in pursuit of EU integration policy and cooperation with China, viewing them as compatible strategies.

Lately, the Georgian economy has seen some benefits from increased monetary flows from Russia, new business registrations as well as heightened trade due to parallel imports since the onset of the war in Ukraine. In 2022, the economy experienced double-digit growth at 10.4% YOY driven by domestic demand and the external sector, which was followed by a robust growth of about 7% YOY in 2023. However, entering 2024, growth appears to be cooling as the influx of Russians and monetary flows moderates, and investments slow. Despite average inflation reaching double digits at 11.9% YOY in 2022, it considerably slowed to 2.5% YOY in 2023 and is expected to remain within the National Bank target of around 3% in 2024. With low inflationary pressures, the National Bank will continue to gradually reduce the policy rate throughout 2024, aiming to reach at least 7% by the end of the year, easing the lending conditions, and thereby supporting consumption.

The government will continue to cut the budget deficit and external borrowing in 2024 as a part of its commitment to fiscal consolidation. Nonetheless, public investment spending, although anticipated to decline by 1 percentage point, will remain significant at approximately 7.9% of GDP, paving the way for continued opportunities in infrastructure projects.

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