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EU4Business Climate Report: Georgia’s business landscape faces growing challenges

Georgia’s business landscape, 01.04.2025
Georgia’s business landscape, 01.04.2025

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Georgia’s business environment is under pressure, with political instability and a shortage of skilled workers identified as the key obstacles to sustainable growth in the latest EU4Business Climate Report for 2024.

According to the report, despite solid economic growth in 2023, businesses are struggling to cope with ongoing uncertainty, including the delayed EU integration process and upcoming elections. Nearly 77% of businesses expressed concerns over political instability as a primary factor affecting their operations.

‘Many companies decided to enter the Georgian market anticipating that the country would move ever closer to the EU. Many of those companies now have legitimate questions and doubts about the future of Georgia’, the ambassador of the European Union to Georgia, Paweł Herczyński, wrote in the opening remarks to the report.

A lack of skilled labour is also taking its toll. According to the report, this skills gap results in significant productivity losses, with an estimated 26% reduction in GDP. Businesses are losing out on an estimated ₾55 billion ($20 billion) annually due to workforce shortages.

The EU remains Georgia’s largest trade partner, but the report shows that barriers to full integration with EU markets persist. High compliance costs, limited access to certification bodies, and a lack of awareness of EU regulations have led to an 18% drop in Georgian exports to the EU in 2023.

Experts argue that urgent reforms in the education and judicial sectors are necessary to address these challenges. Collaboration between the government and the private sector is critical to aligning education systems with the needs of the market and ensuring a steady flow of skilled workers.

An annual assessment

The EU4Business Climate Report is a publication that assesses the business environment in Georgia, particularly focusing on factors that affect the country’s economic growth and development. It highlights challenges faced by businesses, such as political instability, labour shortages, and barriers to EU integration.

The report aims to provide insights and recommendations for improving Georgia’s business climate, helping policymakers and businesses address key issues and enhance the country's competitiveness in the region. The report is part of the EU4Business initiative, which supports private sector development and economic growth in Eastern Partnership countries.

You can access the full report free of charge here.

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