AGP Executive Report

IMF & NBG Governance: The IMF welcomed National Bank of Georgia reforms, including clearer executive responsibilities and steps to strengthen the framework for replacing the NBG president, saying most 2022 safeguards recommendations are now implemented. Credit Markets: S&P upgraded Georgia Capital PLC’s rating to BB- with a positive outlook, citing improved portfolio performance and disciplined debt management. Macroeconomic Outlook: The IMF also projects Georgia’s economy to grow strongly in 2026 (6.5% in the Fund’s latest reporting), while inflation dynamics remain a key watchpoint. Regional Connectivity & Trade: Georgia and Kyrgyzstan marked a historic high-level push, with leaders discussing trade, investment, tourism and transport links, including rail connectivity toward Georgia’s port infrastructure. Energy Costs Pressure: A World Bank-linked note flags that high energy prices can lift export revenues for energy exporters, but hit energy importers like Georgia via higher inflation and weaker real incomes. Aviation: Direct flights between Tbilisi and Bucharest are set to resume from July 1, with Dan Air entering the Georgian market. Finance & Business: Georgia Capital’s S&P update and the IMF’s NBG governance review underline investor focus on stability, while Georgia’s wine exports continue to find room abroad (Georgia ranked 8th in Poland’s wine imports).

IMF Watch: The IMF concluded Georgia’s 2026 Article IV review, keeping the growth outlook at 6.5% for 2026 and flagging inflation staying above target until mid-2027, while noting stronger buffers and a current account deficit at a historical low in 2025. Central Banking Reform: The IMF also welcomed National Bank of Georgia governance steps, including a shift toward more collegial decision-making and removal of discretionary transfers. Credit Markets: S&P upgraded Georgia Capital PLC’s rating to BB- with a positive outlook, citing disciplined debt management and portfolio performance. Infrastructure Finance: Georgia’s Finance Minister said agreements worth $1.2–1.3bn for road and infrastructure projects will be signed soon. Crypto & Power: Police seized 42 more illegal crypto-mining devices in Mestia, bringing the total to 254, as authorities pursue electricity theft cases. Trade & Connectivity: Direct flights between Georgia and Romania resume July 1, and Georgia and Turkmenistan discussed expanding business and investment ties. Tech & Business Climate: Tbilisi hosted the country’s first official Laravel Meetup, while Global Tech Weekend Tbilisi 2026 returns June 19–21. Wine Export Pressure: Georgian wine remains squeezed by Russia’s excise taxes, with producers seeking new routes as Russia takes about 60% of exports.

ADB Regional Initiative: The Asian Development Bank is weighing a $1m regional capacity-building plan that would set up an ADB Center of Excellence covering countries including Georgia and Azerbaijan, financed via its Technical Assistance Special Fund, though scope and timeline are still unclear. Tbilisi Policy & Planning: Tbilisi is rolling out a new transport macromodel approach, while parliament approved final amendments tightening rules on when woody plants can be cut in the city if a construction permit exists. Finance Ministry Talks: Georgia’s Finance Ministry met Cygnum Capital management to brief the bank on Georgia’s macroeconomic and fiscal parameters and development trends. Digital Identity in Europe: The EU Council advanced a “European Business Wallet” framework aimed at faster, legally binding corporate digital identity checks, building on the EUDI wallet model. Local Business & Events: The Tbilisi Coffee Festival returns Sept 26-27 at Expo Georgia, with tastings, workshops, and business meetings. Startup Expansion: Georgian tech startup Kovzy is pushing European expansion with EU backing, offering restaurants an easier way to run online ordering and payments. Regional Connectivity: Azerbaijan, Georgia and Türkiye reaffirmed cooperation in Istanbul, spotlighting the Middle Corridor and Baku–Tbilisi–Kars railway.

Startup & E-commerce: Kovzy, a Georgian SaaS platform for restaurants, says it cut the cost and hassle of launching online ordering and payments—aiming to help small hospitality businesses sell directly online in days. Banking & Markets: TBC Bank executive Nika Kurdiani received deferred TBC PLC shares under a long-term incentive scheme, while the Pension Fund of Georgia reported GEL 9.4bn in assets and strong May returns driven by international tech stocks. Central Banking: The National Bank of Georgia bought an extra $100m of gold bullion, lifting monetary gold to 15.5% of reserves as reserves hit a record $7.0bn. Wine Sector: Parliament approved amendments to the “On Vine and Wine” law, including a lower 25,000-liter cap for small wine cellars and new labeling and testing rules for certified products. FDI & Investment Climate: Geostat data showed FDI up 47.7% to $271.2m in Q1 2026, and PM Kobakhidze said the government will keep pushing to attract more investors. Tourism & Real Estate: Archi and NEXT announced a USD 300m Swissôtel Kobuleti Beach Resort with pre-sales opening, and Rotana’s first mountain resort concept was unveiled for Gudauri. Global Finance Deal: BTG Pactual TIG agreed to acquire about 90,000 acres of U.S. timberland from Jamestown, including around 50,000 acres in Georgia and Alabama.

Aviation & Energy Shock: The U.S. launched airstrikes on Iran after blaming Tehran for the crash of a U.S. Army helicopter near the Strait of Hormuz, with Iran retaliating and alerts reported across Bahrain, Kuwait and Jordan—raising fresh fears for regional shipping and global fuel costs. Georgia–China Upgrade: Georgia and China moved their ties to a “comprehensive strategic partnership,” with Prime Minister Irakli Kobakhidze citing deeper political and economic cooperation, visa-free travel and expanded air links. Transport & Infrastructure: Georgia’s government is preparing a state-backed model for road maintenance, aiming to fix quality issues seen with private contractors and create a “stable resource,” with an initial capital estimate of about 63 million GEL. Regional Power Flows: Russia’s Inter RAO said cross-border electricity trade with southern partners, including deliveries to Georgia, is expected to stay around last year’s level in 2026, while exports to Turkey may resume no earlier than September. Tech & Business Events: Studio Liberty is the main partner of Global Tech Weekend Tbilisi 2026 (June 19–21), offering members discounts on event passes and tickets. Azerbaijan Energy Push: Azerbaijan plans eight new solar plants and a large wind farm by 2027, with several major projects scheduled to come online before end-2026.

Roads & State Capacity: Georgia plans to create a state road maintenance company, shifting highway upkeep away from private contractors; the draft law sets up a private-law legal entity, with initial capital of about 63m GEL (excluding VAT) and 163 jobs, aiming for more reliable service quality and faster response to natural events. China Ties Upgrade: Georgia and China have moved relations to a “comprehensive strategic partnership,” announced via congratulatory letters between Xi Jinping and President Mikheil Kavelashvili, with officials citing visa-free travel, direct flights, and expanding air links. FDI Boost: Geostat says foreign direct investment hit $271.2m in Q1 2026, up 47.7% year-on-year, driven mainly by reinvested earnings; the UK led inflows, followed by the US and Netherlands, while finance/insurance and real estate were top sectors. Banking & Markets: TBC Bank approved the final dividend for 2025 at GEL 3.87 per share (June 22), using an NBG FX average rate; separately, TBC’s group got Uzbekistan’s regulator approval to acquire OLX, with competition safeguards. Energy Infrastructure: BP says it will transfer operations of the Baku–Supsa pipeline to Azerbaijan and Georgia while meeting contractual obligations, with the handover expected in June. US-Georgia Political Risk: The US House passed the Countering China’s Control of the Caucasus Act, requiring classified reporting on Russian and Chinese influence and intelligence activity in Georgia and a five-year US-Georgia strategy. Pharma Logistics: EBRD extended a €10m loan to Aversi Pharma to renovate and automate a new central Tbilisi warehouse, targeting up to 40% energy savings and improved medicine supply reliability.

Trilateral Diplomacy for Trade: Türkiye, Azerbaijan and Georgia’s foreign ministers met in Istanbul and pledged deeper cooperation on security, transport and energy, pointing to the Middle Corridor and the Baku-Tbilisi-Kars railway as key economic links. Consumer Policy & Digital Markets: Georgia’s Competition and Consumer Protection Agency (GCCA) outlined priorities for its upcoming ICPEN presidency, with a focus on building trust in the digital age, protecting consumers in AI-driven markets, and safeguarding high-risk groups. Growth Outlook: Georgia’s real economic growth forecast for 2026 was reiterated at 6.3%, with subsequent years expected to run around 5–5.5%. Armenia Vote’s Regional Impact: Armenia’s election victory for Nikol Pashinyan drew international congratulations and renewed talk in the region about peace, border opening and cooperation—issues Georgia officials say matter directly for South Caucasus stability and future economic ties. Energy & Connectivity: Georgia and Turkey signed memorandums on melioration infrastructure and forestry management, while regional connectivity plans continue to be tied to economic progress.

Regional Diplomacy: Georgia, Türkiye and Azerbaijan wrapped their 10th trilateral foreign ministers’ meeting in Istanbul and signed the Istanbul Declaration, reaffirming cooperation across politics, trade, investment, energy security and connectivity, with officials pointing to the Baku-Tbilisi-Kars railway and other strategic projects as proof of results. EU-Georgia Visa Talks: The European Commission will hold its first face-to-face meeting with Georgia on the suspension of diplomatic visas on June 11, after Brussels paused the visa exemption scheme until March 2027 over concerns about democratic and rights-related backsliding. Trade & Transport: APM Terminals Poti reported 8.2% growth in container cargo turnover in Jan–May 2026 (277,081 TEU), alongside higher general cargo and more container ships handled. Local Infrastructure: Batumi City Hall signed a contract for a new road near the Batumi landfill, linking the Gonio bridge area to the New Boulevard extension. Labor Policy Watch: Hungary ended the guest-worker residence-permit system immediately, though employment-purpose permits remain possible for Georgians if legal conditions are met. Market Mood: Georgian companies’ shares fell on the London Stock Exchange, with major listed firms closing the week in the red.

Armenia-Georgia Diplomacy: Georgian PM Irakli Kobakhidze congratulated Nikol Pashinyan on his party’s election success, reaffirming close cooperation and the strategic partnership between the two countries. Armenia Election Watch: Multiple reports frame Armenia’s parliamentary vote as a geopolitical pivot between a European path and continued ties with Russia, with Pashinyan stressing peace with Azerbaijan and deeper cooperation with Georgia while seeking normalization with Turkey. Regional Connectivity Talks: Türkiye, Azerbaijan and Georgia will hold their 10th trilateral foreign ministers’ meeting in Istanbul, with an agenda focused on transport, transit routes, energy security and trade—positioning the South Caucasus as a key corridor amid uncertainty. Cross-border Security Cooperation: Georgia’s Interior Ministry says it arrested an internationally wanted Russian citizen at Tbilisi airport with FBI support over alleged sanctions evasion, with extradition steps underway. Labor Migration Policy Shock (Hungary): Hungary tightened guest-worker rules, stopping accelerated entry for workers from the Philippines, Georgia and Armenia—prompting coordination efforts by the Philippines’ migrant workers department and raising concerns for employers. Energy & Costs (US, context): US gas-price reports show volatility and localized lows, underscoring how global supply disruptions keep feeding consumer pressure.

Armenia-EU vs Russia stakes: Armenian PM Nikol Pashinyan said ties with Georgia are already so strong it’s “difficult to even talk about deepening,” while also signaling closer cooperation and optimism on normalizing relations with Türkiye as parliamentary elections unfold. Regional diplomacy & trade: Türkiye, Azerbaijan and Georgia will hold their 10th trilateral foreign ministers’ meeting in Istanbul, with transport, the Middle Corridor, energy security and trade-economic cooperation on the agenda. Sanctions & cross-border business risk: A Russian national wanted by the FBI was detained at Tbilisi airport on US sanctions-evasion allegations tied to aircraft spare parts. Labor migration shock: Hungary will stop issuing work visas for nationals of the Philippines, Georgia and Armenia, with officials citing wage pressure concerns—an issue already drawing attention from investors and recruitment firms. Local economy & development: Tbilisi’s municipal development fund is rehabilitating Public School No. 50, while a major office project (“Colliers Georgia”) is under construction in the capital. Energy prices backdrop: US gas prices remain volatile, with Georgia averages shifting week-to-week as global oil and regional supply conditions move.

Sanctions & Extradition: A Russian citizen, Tatiana Kurashkevich, was detained at Tbilisi airport at the request of the United States over alleged sanctions-evasion and aircraft parts supply to Russia; Georgia’s Interior Ministry says the case is coordinated with the FBI, and the Tbilisi City Court ordered three months of pre-trial detention pending extradition. Regional Energy & Trade: Azerbaijan is positioning itself as a key gas buffer as Israel’s gas flows to Egypt and Jordan fluctuate, with SOCAR expanding across Israel-linked energy activities and discussing further growth at the Baku Energy Forum. Middle Corridor Logistics: New Eurasian trade realities are pushing further Middle Corridor expansion, underlining how land transport corridors are becoming central for regional supply chains. EU-Labor Migration Shock: Hungary will stop issuing worker visas to nationals of the Philippines, Georgia and Armenia from Friday, citing concerns about wage pressure and tightening rules for guest workers. Aid Route Disruption: WFP says fortified biscuits reached Afghanistan after a 15,000 km detour through nine countries, including Georgia, after border closures and shipping disruptions. Sports: Bahrain’s national team resumed training in Antalya after losing 2-0 to Georgia in Tbilisi, ahead of a friendly vs Syria.

Armenia-EU vs Russia Trade War: EU Commission President Ursula von der Leyen said the bloc will deliver an emergency support package of over €50m for Armenia after Russia expanded restrictions on Armenian agricultural exports, calling it “economic coercion” and pointing to shipments like 10,000 flowers to Latvia. Regional Geopolitics: As Armenia votes on June 7, analysts frame it as a more openly geopolitical contest over security and foreign-policy direction, with Russia and the EU both watching closely. Black Sea Security: In Romania’s Constanta, a sea drone self-detonated near an oil terminal after Ukraine said Russian jamming caused it to drift off course, with officials citing timely warnings and no casualties. SPIEF Drone Escalation: Ukraine fired hundreds of drones at Russia’s St Petersburg during SPIEF’s final day, killing one person and setting an oil depot ablaze, while Russia reported intercepting 376 drones. Georgia Business & Finance Links: VTB signed cooperation agreements with 15 Russian regions at SPIEF covering banking infrastructure, investment projects and business financing support. E-commerce Rules: At SPIEF, RWB, Ozon and Avito agreed amendments to fair-platform practices, including non-discriminatory commissions for Russian vs foreign sellers and more transparency on payment terms.

Real Estate & Construction: Colliers Georgia says up to 150,000 sq m of new office space is under construction in Tbilisi, with Saburtalo leading and activity also spreading to Didi Digomi, Samgori and Nadzaladevi. Education & Infrastructure: The Georgian Municipal Development Fund is rehabilitating Tbilisi Public School #50 in Mtatsminda, a cultural heritage monument. Finance & Markets: Bank of Georgia acted as custodian for Uzbekistan’s first large-scale dual listing IPO, settling $603.6m via London and Tashkent. Energy & Transport: Georgia reissued tenders for the Rustavi–Red Bridge and Algeti–Sadakhlo highway sections, a 61.2 km, four-lane project with bridges and interchanges, financed by an EIB loan plus the state budget. Corporate Moves: SOCAR completed its acquisition of 99.82% of Italiana Petroli, expanding its integrated energy footprint in Europe. Hospitality & Tourism: Archi and NEXT, with Swissôtel, officially launched a $300m Swissôtel Kobuleti Beach Resort project. Labor Policy: Hungary will stop issuing work visas to people from Georgia (along with the Philippines and Armenia) starting Friday.

Black Sea Tourism & Real Estate: NEXT and Archi teamed up with Swissôtel to officially launch the three-tower Swissôtel Kobuleti Beach Resort in Georgia, with the PM and Economy Minister among the guests. Banking & Capital Markets: Bank of Georgia acted as custodian for Uzbekistan’s first large-scale dual listing, supporting a $603.6m IPO via GDR infrastructure. Finance & Deposits: The National Bank reports deposit dollarization trends and falling deposit interest rates, while Lion Finance Group cancelled 36,000 treasury shares. Energy & Policy: Georgia’s Interior Ministry seized 148 crypto mining devices in Mestia, citing illegal electricity use; meanwhile, the government approved new school rules requiring phone and smartwatch storage in classrooms. EU/Regional Trade Pressure: EU leaders pledged over €50m in support for Armenia after Russia’s trade restrictions, as Moscow shifts agricultural import contracts toward Azerbaijan. Migration & Labor: Hungary will stop issuing new work visas to citizens of Georgia and Armenia, tightening guest-worker recruitment rules. Public Safety: Abanotubani Group said safety standards were followed after two deaths in an Old Tbilisi bathhouse, with an investigation underway.

Duchenne Medicines Breakthrough: Parent Kakha Tsikarishvili says Georgia’s decision to fund treatment likely reflected public support, Patriarchate involvement, and a letter to Bidzina Ivanishvili, while also hinting at possible personal intervention. City Economy Snapshot: Georgia’s statistics show Tbilisi dominated enterprise activity in Q1, with 80.8% of turnover and 65.7% of output concentrated in the capital. Local Governance: Tbilisi Mayor Kakha Kaladze stressed that sustainable development is about citizens’ well-being, not just economic indicators. Banking & Payments Exchange: An Armenian Central Bank delegation met the National Bank of Georgia to compare experience from NBG’s RTGS and ACH upgrade project. Regional Outlook: The EBRD’s regional prospects report flags uneven growth across the Caucasus, with Armenia and Georgia still growing but inflation pressures returning. Crypto Policy Push: Georgia’s government backs a plan to introduce a GEL₮ stablecoin, drawing scrutiny over transparency and state-linked involvement. Trade & Energy Links: Coverage also points to Georgia’s role in regional connectivity, including upgrades tied to the Baku–Tbilisi–Kars corridor.

Middle Corridor Boost: Georgia completed upgrades on the BTK railway’s 180km Georgian section, lifting freight capacity from 1m to 5m tonnes a year and marking full-scale operation with ministers from Azerbaijan, Georgia and Türkiye. Energy Security Plan: Georgia is exploring a green hydrogen pipeline alongside a planned Black Sea electricity cable to strengthen the Black Sea green energy corridor and export clean gas plus power. Trade & Payments: Armenia’s central bank delegation visited Georgia’s National Bank to discuss modernization of real-time settlement and clearing systems, including plans for instant payments and ISO 20022. Business Performance: Geostat reports business-sector turnover rose 11% in 1Q26 to 62bn GEL, with higher production value and employment. Health & Pharma Access: After months of protests, the government agreed with parents of children with Duchenne muscular dystrophy on specific medicines; a working group with the Health Ministry will start procurement steps. Local Investment: TBC-backed M25 premium office/coworking complex opened in Tbilisi with EUR 8.5m investment. Diplomacy Watch: Georgia said it will not join the upcoming “3+3” meeting in Saint Petersburg, reiterating it has never participated in that format. Regional Context: EU announced €50m immediate support for Armenia after Russia imposed new export restrictions, calling it economic coercion.