Weekly Market Watch

Georgia’s economy surged by 10.7% y/y in Mar-26
Georgia’s economy surged by 10.7% y/y in Mar-26, following 8.8% y/y growth in previous month. Overall, Georgia’s economy grew by 9.1% y/y in 1Q26.  While geopolitical tensions in the Middle East have weighed on the hospitality sector, the broader economy has shown notable resilience. Most sectors have continued to expand, supported by strong commodity prices, solid export performance, and steady remittance inflows, which have reinforced both external and domestic demand. Reflecting the stronger-than-expected 1Q performance, we have raised our 2026 GDP growth forecast to 7.0% from 6.0% (see latest macro forecasts here). 

Bank lending growth accelerated to 14.9% y/y in Mar-26
In Mar-26, the banking sector loan portfolio growth accelerated to 14.9% y/y (+2.4% m/m) excluding FX effect, up from 14.2% y/y in previous month. In unadjusted terms, the loan portfolio rose by 14.7% y/y (+2.4% m/m) to GEL 72.7bn (US$ 26.9bn). By segment, lending to legal entities gained momentum, rising by 13.2% y/y (excluding FX effect) in Mar-26, compared to 12.0% y/y growth a month earlier, while retail loans growth remained strong at 16.5% y/y (+16.2% y/y in Feb-26). Loan dollarization edged up to 42.5% (+0.27ppts m/m and -0.61ppts y/y) in Mar-26.
On the funding side, deposit growth also strengthened, rising to 19.4% y/y (excluding FX effects) in Mar-26, from 18.5% y/y growth in previous month, reaching GEL 69.5bn (US$25.7bn). By currency, GEL deposits increased by 34.3% y/y (vs. 34.8% y/y in Feb-26), while FX deposits grew by 6.1% y/y (vs. 4.0% y/y in Feb-26). As a result, deposit dollarization stood at 46.6% (+0.63ppts m/m and -6.17ppts y/y) in Mar-26. 

NBG’s intervention was minimal in Mar-26
In Mar-26, the NBG intervened only modestly in the FX market, recording net FX sales of US$16.2mn. This followed a brief period of GEL depreciation of 2.7% after the Middle East conflict intensified in late February. Overall, in 1Q26 net cumulative purchases stood at US$ 499.7mn driven by FX purchases in January-February.