Iran Escalation: Fifty Days on - Assessing Georgia’s Resilience

While the Iran escalation has persisted well beyond one-month, incoming data point to economic outperformance. In Mar-26, goods exports and remittances continued to grow year-on-year, tax revenues and VAT turnover - a real-time proxy for economic activity - remained robust, and the lari returned to an appreciating trend from mid-March. Based on these indicators, we estimate March GDP growth at above 6.0% y/y. Combined with 8.4% y/y growth in January-February, this implies a strong 1Q. As a result, we maintain our full-year 2026 growth forecast at 6.0%, as the Middle Eastern escalation has so far had limited spillovers into broader economic activity.