Page 26 - Caucasus Outlook 2025

Following privatisation and foreign aid initiatives, food processing is expanding, and Georgian-branded products, including wine, nuts and mineral water, are gaining international recognition. This has also been helped by the signing of international trade agreements.
While global wine production is set to face yet another year of decline in 2024, Georgia is seen as one of the strongest performers. The country is expected to see a 27% increase in wine production, reaching 2.4mn hectolitres – its highest level since the early 2000s, according to the International Organisation of Vine and Wine (OIV). Georgia reported total revenue from wine exports reached $196.6mn, up 16.1% y/y, in the first eight months of 2024.
Tourism remains a key pillar of Georgia’s economy despite ongoing political instability in 2024, which is expected to persist into 2025.
International visitors rose by 2.5% y/y to 2.4mn in Q3 2024, driven by an 8.3% increase in tourists, though same-day visits declined by 15.2%. Total arrivals for the first nine months of 2024 reached 4mn, fully recovering to pre-pandemic levels (2019). Non-neighbouring markets fueled growth, with Russia, Turkey, Armenia, Israel and Kazakhstan contributing 65.6% of arrivals. Israel saw the highest growth (+36% y/y), while Turkey’s numbers declined (-12.5% y/y). Other key contributors included China, Iran, Belarus and Saudi Arabia.
Tourism revenues hit a record $1.6bn in Q3, an 8% y/y increase. Russia, Israel and Saudi Arabia showed strong revenue growth, while the EU and Turkey saw declines. With expanding direct flights, including easyJet's planned Luton-Tbilisi route in 2025, tourism revenue is projected to reach $4.4bn in 2024, according to local investment bank Galt & Taggart.
Georgia's ICT sector has experienced significant growth, making it the country’s fastest-growing industry since 2022, a report from Galt & Taggart said. Exports reached $892mn in 2023, highlighting substantial growth potential. Tax incentives introduced in 2020 initially spurred this expansion, but the relocation of international companies and IT professionals from Russia and Ukraine after 2022 further accelerated progress. Georgia’s appeal is bolstered by competitive internet and co-working prices, low living costs, a favorable environment for foreign specialists, and its strategic location. The sector's export-oriented focus and supportive conditions have positioned it as a key driver of the nation’s economic growth.
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