Fitch Improves Georgia's Rating Outlook to "Stable"

Fitch Ratings has revised its outlook on Georgia's long-term foreign currency Issuer Default Rating (IDR) from "Negative" to "Stable" and affirmed the rating at "BB". The agency explains the decision by citing the growth of reserves, improvement in macro indicators, and reduction of external imbalances.

In a published press release, the international rating agency Fitch reported that Georgia's IDR outlook has been raised to "Stable", while the rating itself remains at "BB". According to the agency, the key factor in the revision was the increase in international reserves: by October 2025, they had grown to a record $5.6 billion, which is 37% higher than the minimum in October 2024. Fitch indicates that the growth was driven by active currency purchases by the National Bank, higher gold prices, as well as stable tourism revenues and remittances.

The agency also notes the strong dynamics of the economy: in January-September 2025, Georgia's GDP increased by 7.8% year-on-year. Fitch's forecast assumes GDP growth of 7.3% in 2025 and about 5% annually in 2026-2027. A significant reduction in external imbalances also supported the assessment: the current account deficit is more than half the average level of 2015-2019 and, according to the agency's expectations, will stabilize at around 5% of GDP in 2025-2027.

However, risks remain. Fitch draws attention to political uncertainty, geopolitical threats, and the vulnerability of the economy to external shocks. Analysts emphasize that "a protracted or deeper political crisis could lead to a deterioration in governance standards and a weakening of investor confidence." In addition, the agency points to the deterioration of Georgia's relations with the EU and the lack of prospects for resuming membership negotiations. It is also noted separately that the MEGOBARI Act, which provides for possible sanctions risks against high-ranking Georgian officials, has been blocked in the US Senate.

Despite these factors, Fitch emphasizes the stability of the country's financial system. The banking sector remains stable, problem loans are at a low level, and dollarization is decreasing. Government finances, according to the agency, are in good condition: the budget deficit is projected at 2.4% of GDP, and government debt at 33.6% of GDP, which will be the lowest figure in the last 11 years.

The agency also highlights the prospect of growth in foreign direct investment. According to its data, large infrastructure and development projects, including an agreement with an investor from the UAE for almost $6.6 billion, could support long-term capital inflows into the country.