Fitch affirms Georgia's rating at 'BB', revises outlook to 'positive'

TBILISI. Nov 2 (Interfax) - Fitch Ratings has affirmed Georgia's long-term issuer default rating (IDR) at "BB" and revised the outlook from "stable" to "positive," the agency said.

The revision of the outlook reflects a significant accumulation of international reserves by Georgia, the prospect of a sustained narrowing in the current account deficit, and stable growth performance, according to the press release.

Fitch noted that strong economic growth, a high level of economic development, sound macroeconomic policy, moderate public debt, and a resilient banking sector support Georgia's rating. Conversely, heightened political tensions, persistently high dollarization of financial resources, significant exposure of public debt to exchange-rate risk, and a high level of net external debt balance these factors.

Fitch forecasts GDP growth of 7.5% for 2026, based on solid data from the first half of the year. GDP growth is then expected to slow down gradually in 2027-2028, moving closer to the economy's estimated medium-term potential growth rate of 5%.

Fitch also highlighted the country's record-high international reserves, which reached $8.2 billion in September, an increase of $2 billion since the end of 2025. The accumulation of reserves is driven by a narrowing current account deficit, capital inflows, a prudent monetary policy, and growing confidence in the policy, which has led to increased demand among residents for national currency-denominated assets.

According to the forecast, the current account deficit could narrow to 1.5% of GDP this year from 2.9% of GDP in 2025 and 5.1% of GDP in 2024. Fitch noted uncertainty regarding the sustainability of the country's export performance, as it is driven largely by the re-export of vehicles and oil refining, a sector that relies exclusively on imported crude oil. Consequently, the current account deficit should stabilize at around 3.5% of GDP in 2027-2028, Fitch said.