Georgia’s National Statistics Bureau (Geostat) has said that the country's economy grew by 10.7% in March, with growth being primarily driven by the IT, transport, manufacturing, and mining sectors. Tourism appears to have taken a hit as the Iran conflict continues to loom over the region.
According to Geostat’s executive director Gogita Todradze, in the first quarter of 2026, Georgia’s economy expanded by 9.1% year-on-year. In March, the turnover of Georgia’s private sector — VAT-paying companies — reached ₾15.6 billion ($5.8 billion), marking a 13.4% increase compared to the same period last year. Economic growth was observed across nearly all sectors, except for hotels and tourism, as well as administrative and support services.
Separate data from Geostat also highlights a downturn in tourism revenues. Visitor spending in the first quarter totalled ₾2.2 billion ($820 million), down 5.2% year-on-year. The average spending per visit also declined by 5%, reaching ₾1,897 ($700).
‘The growth in the manufacturing sector was driven by oil products and the expansion of their production; in March 2026, the sector grew tenfold year-on-year’, Todradze said.
‘Growth in the information and communication sector was supported by computer programming and consulting services. Mining growth was driven by ferroalloys, while construction and transport also contributed to overall growth’, she continued.
On the same day, Bank of Georgia’s investment arm, Galt and Taggart, published its monthly report on Georgia’s economy, also noting that the Iran conflict ‘remained concentrated in hospitality’. They revised their 2026 inflation forecast from 4.2% to 4.8% as global oil prices ‘are taking longer to normalise’. The group predicted that the Georgian Lari would remain ‘broadly stable throughout 2026’.
Prior to the ceasefire in Iran, experts have warned that the conflict could damage Georgia’s tourism industry, as airspaces in the wider region were closed as the war raged on.
A revision of a forecast by Galt & Taggart lowered Georgia’s 2026 tourism revenue forecast from $5 billion to $4.9 billion citing the war. It reflected Georgia’s significant exposure to tourism from the Middle East, which accounts for 10%–11% of total international visits and roughly 20% of tourism income — a disproportionately high share because Gulf visitors typically spend more than average tourists.
In 2025, Georgia earned approximately $4.7 billion from international tourism, with Russia remaining the single largest source market at $697 million.
Helena Bedwell
