DOI kodi: 10.52340/ekonomisti.2026.02.20

Extended Summary

This article examines Georgia’s economic policy evolution during 2010–2026. It also assesses near-term policy prospects. The analysis focuses on external shocks, institutional adaptation, and changing development priorities. The central argument is clear. Georgian economic policy did not move linearly from crisis to stability. It evolved from post-crisis stabilization toward a wider transformation regime. Fiscal and monetary credibility remain essential. Yet they are no longer sufficient by themselves. By the mid-2020s, effectiveness depended on a broader policy mix. This mix includes competition policy, SOE governance, digital infrastructure, sustainable finance, logistics, energy policy, and sectoral coordination. Therefore, the article treats economic policy as institutional architecture. Through this architecture, the state shapes incentives, manages risks, and supports long-term transformation.

The study addresses a clear analytical gap. Research on Georgia’s development is often fragmented. Macroeconomic studies emphasize inflation, debt, exchange rates, and fiscal rules. Sectoral studies examine tourism, water, energy, finance, or digital innovation. Policy reports focus on European integration, competition, or state-owned enterprises. Georgian academic works often analyze the state’s role and selected crises. Less common is an integrated, periodized interpretation. This article combines historical-comparative, institutional, macroeconomic, and sectoral analysis. It uses IMF, World Bank, Geostat, NBG, ministry, and Energy Community materials. It also integrates selected works by Georgian economists.

The article identifies four broad phases. The first phase covers the early 2010s. It was defined by post-crisis stabilization and fiscal consolidation. Policy aimed to restore credibility, contain debt, and recover investor confidence. The second phase intensified after 2014. It involved approximation to the European Union through the Association Agreement and DCFTA. This stage strengthened legal harmonization, standards, competition adaptation, and institutional modernization. Georgia still remained exposed to exchange-rate pressures, remittances, regional demand, and tourism shocks. These vulnerabilities limited the developmental effect of macroeconomic stabilization.

The third phase emerged during 2020–2021. It represented a decisive anti-crisis turn. The COVID-19 pandemic changed the state’s economic role. It also reconfigured the hierarchy of policy goals. Policy became an instrument of immediate stabilization. It relied on transfers, emergency health spending, business support, liquidity protection, and basic-service continuity. The pandemic exposed sectoral vulnerability in a small open economy. Tourism collapsed, revenues weakened, social risks increased, and exchange-rate pressures returned.

The fourth phase began after 2022. It is interpreted as policy synthesis, not simple normalization. Russia’s invasion of Ukraine created a new regional environment. Georgia faced uncertainty and benefited from redirected financial, migration, logistics, and service flows. High growth, disinflation, and strong inflows created a new configuration. This period raised questions about growth quality, SOE governance, competitive neutrality, and digital-market competition. Digital strategy, fintech reform, sustainable finance, energy planning, SME support, and logistics policy gained central importance. Together, they show that economic policy became more integrated and structural.

The article finds that policy quality cannot be assessed only by GDP growth. Inflation and fiscal balances also remain insufficient indicators. The key question is whether growth improves productivity and resilience. Another question is whether markets remain competitively neutral. SOEs should not create hidden fiscal risks. Labor markets should generate high-quality employment. The economy should absorb future shocks without major welfare losses. Georgia’s case shows that macroeconomic credibility is necessary but incomplete. The next stage requires stronger implementation and better coordination. Digital and green agendas should operate as instruments of productivity and resilience.

The article proposes three scenarios for 2026–2030. In the baseline scenario, growth remains close to 5 percent. Inflation gradually converges toward the target. Public debt remains manageable. Yet reform continuity becomes increasingly important. In the optimistic scenario, digital reforms, fintech infrastructure, energy policy, logistics, and skills upgrading raise productivity. This allows growth to remain near the 5.5–6.0 percent corridor. In the risk scenario, external shocks or delayed reforms slow the economy. Renewed inflation, weaker inflows, or geopolitical deterioration may create additional pressure.

The article concludes that Georgia moved from stabilization policy to transformation policy. The first stage established macroeconomic credibility. The second stage deepened approximation to European norms. The third stage expanded the state’s anti-crisis role. The fourth stage connected governance, digitalization, competition, sustainable finance, energy, logistics, and resilience. The practical contribution is an integrated analytical framework. It links macroeconomic management with institutional and sectoral policy. This framework clarifies the factors shaping Georgia’s 2026–2030 development path.

Keywords: Economic policy; Georgia; macroeconomic stability; state-owned enterprises; competition policy; digital economy; green transition; European integration.

JEL Classification Codes: E52, E61, E62, O21