The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Georgia: Paying the price of integrity

Georgia’s ill-fated attempt to prevent the secession of South Ossetia and Abkhazia is set to cost the country billions of dollars, but financial backing from western Europe and the US should help to ensure that the country’s economy remains one of the most open and business-friendly of the states that were formerly part of the Soviet Union.

Georgia lost to Russia militarily but in public relations terms the country has come out on top and looks set to receive substantial overseas funding to help pay the $1 billion repair bill for damage to its civilian infrastructure. On the economic front, the achievements since the Rose Revolution in 2003, which brought pro-western president Mikheil Saak’ashvili into power, have been impressive. Foreign direct investment has quadrupled to $2 billion and GDP per capita has doubled to $2,315. However, whether or not Georgia can maintain its economic progress in the face of outright Russian hostility and the loss of South Ossetia and Abkhazia remains open to question.

Economy minister Eka Sharashidze estimates that the Georgian economy has sustained $1.5 billion-worth of direct and indirect losses as a result of the conflict, roughly equivalent to 12% of GDP. Most of the immediate disruption to business has come from road closures and the destruction of bridges. Some $100 million has been withdrawn from the banking system, roughly 5% of pre-conflict deposits.

Strong financial position

The currency has remained stable, however, with the Georgian lari trading around the pre-conflict level of GeL1.41 to the dollar, thanks to a healthy level of foreign-currency reserves and pledges of financial support from the US and other members of the G7 group of industrialized nations.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.

By continuing to use & browse the site you agree to our Privacy Policy.
I agree