Business Insider Georgia conducted an exclusive interview with Lesley Bearman Lahm, ADB Country Director in Georgia. In the interview, Lesley Bearman Lahm discusses Georgia`s macroeconomic environment, ADB`s priority sectors in the country context, the investment climate and competitiveness, the monetary policy of the National Bank of Georgia (NBG), Georgia`s role in regional connectivity and cross-border infrastructure corridors, the country`s energy security and its potential in this area, the effectiveness of ADB`s cooperation with the Government of Georgia, structural reforms, and the current and future economic outlook.

"--- How does ADB assess Georgia`s current macroeconomic environment and growth outlook for 2025–2026? From ADB`s perspective, what is Georgia`s long-term economic potential?

--- The Georgian economy has demonstrated resilience to global shocks, supported by prudent macroeconomic management and solid fundamentals. Growth remains robust, reaching 7.5% in 2025 and is expected to moderate to 5.5% in 2026 and 5.2% in 2027, reflecting softer internal and external demand.

At the same time, the outlook is becoming more complex. External risks remain elevated, particularly due to the ongoing Russian invasion of Ukraine and conflict in the Middle East. These developments could weigh on global economic activity, disrupt trade and supply chains, and contribute to inflationary pressures, with implications for a small and open economy such as Georgia.

Overall, ADB assesses that Georgia`s long-term growth potential remains solid, provided reform momentum continues, infrastructure gaps are addressed, and external vulnerabilities are managed carefully. The country`s strategic geographic location creates opportunities to deepen its role as a regional transit and trade gateway. Continued commitment to regional integration and connectivity can support trade diversification and strengthen economic resilience.

---What are ADB`s priority sectors in Georgia for the coming year - transport, energy, municipal services, digitalization, infrastructure or private sector development?

---ADB`s priority sectors in Georgia are guided by our Country Partnership Strategy for 2024–2028, which was developed through extensive consultations with the Government of Georgia, development partners, the private sector, civil society, and academia. For the coming year, our focus will remain on a select number of high‑impact sectors where ADB can deliver the strongest development results. This includes continuation of Georgia’s strategic transport infrastructure upgrade – strengthen Georgia`s role as a regional transport and logistics hub, particularly along the Central Asian Regional Economic Cooperation (CAREC)’s Corridor 2, which largely coincides with Middle Corridor, expanding multimodal transport and logistical connectivity through linking roads more effectively with ports, rail, and logistics facilities and thus supporting regional cooperation and integration. We also work to increase clean energy generation and export potential, develop domestic value addition, particularly in agriculture and tourism and help accelerate private sector-led growth, along a low-carbon path.

---How does ADB assess Georgia`s investment climate and competitiveness relative to regional peers?

---Georgia`s investment climate is relatively favorable within the region, supported by a liberal economic framework, open trade policies, and a generally business-friendly regulatory environment. These factors have helped to attract investment and support private sector activity.

At the same time, important challenges remain. Structural constraints such as limited access to finance, particularly outside Tbilisi, skills mismatches, and infrastructure gaps continue to affect competitiveness.

Institutional capacity, capital market development, and productivity levels also require further strengthening. In addition, the suspension of progress in the European Union (EU) accession process, together with related signals from the EU, may introduce some uncertainty, with potential implications for export performance and investment sentiment.

Compared with regional peers, Georgia performs well in terms of regulatory simplicity and openness, though continued progress in addressing these structural constraints will be important to sustain and deepen its competitiveness over the longer term.

---What is ADB`s view on Georgia`s fiscal framework and public debt sustainability?

---Georgia`s fiscal framework is prudent and credible, with recent developments reflecting continued fiscal discipline and effective management of public finances. The fiscal deficit narrowed to 1.2% of GDP in 2025, supported by solid revenue performance and more moderate expenditure growth, while public debt declined to below 35% of GDP, remaining well below commonly referenced prudential benchmarks.

Georgia`s continued access to international capital markets, including the successful Eurobond rollover with strong investor demand and favorable pricing, further reflects confidence in the country`s macroeconomic management and fiscal credibility.

At the same time, maintaining fiscal discipline will remain important given elevated external uncertainties. Close monitoring of fiscal risks, particularly those related to state-owned enterprises, public-private partnerships, and exchange rate exposure in public debt, will be important to safeguard debt sustainability and contain potential pressures on public finances.

---How do you assess the National Bank of Georgia`s monetary and regulatory policies in the current environment?

---The National Bank of Georgia`s monetary and regulatory stance remains strong in the current environment. Downside risks remain elevated, particularly from Georgia’s exposure to global and regional shocks, persistent external price pressures, and high dollarization. In response to elevated inflation risks, including those driven by higher global oil prices, the policy rate has been maintained at a relatively tight level of 8%. The National Bank of Georgia has also clearly signaled its readiness to tighten further should inflationary pressures intensify or expectations become less anchored.

At the same time, reserve accumulation has strengthened external buffers. Gross international reserves reached a record level of approximately $6.65 billion as of February 2026, exceeding conventional adequacy benchmarks. This is particularly important given the economy`s high dollarization and exposure to external shocks. On the financial sector side, the banking sector remains resilient. Effective de-dollarization and macro–prudential measures implemented by NBG have helped reduce currency-induced credit risk and over-indebtedness, while also strengthening the system through deposit insurance and the establishment of a resolution fund to support banking sector stability and resolution capacity. Strong capital adequacy, high profitability, and low nonperforming loans reflect solid fundamentals of the financial sector.

---What role does ADB see for Georgia in regional connectivity and cross-border infrastructure corridors?

Georgia is an anchor country along regional connectivity and cross‑border transport corridors, particularly the CAREC Corridor 2 and the Middle Corridor linking Central Asia, the South Caucasus, and Europe. Georgia is enabling the movement of goods between the Black and the Caspian Sea regions, and beyond, and it is also a logistics node where improved roads, ports, railways, and border facilities can generate local value-added through transport services, trade, tourism, and employment.

ADB`s investments in the East–West highway corridors, including sections connected to international trade routes, directly support this role. Projects like the Batumi Bypass Road and other strategic road sections reduce congestion, improve safety, and shorten travel times for regional freight. At the policy level, ADB has also supported reforms to improve transport efficiency, customs coordination, and cross‑border logistics - critical elements for turning infrastructure into real connectivity.

Georgia is well‑positioned to benefit from diversified trade routes, especially as global supply chains seek resilience. Continued investment in multimodal transport - roads linked seamlessly to ports and rail - will be essential for Georgia to fully capture this opportunity.

---What is ADB`s assessment of progress in Georgia`s transport sector modernization?

---Georgia has made impressive progress in upgrading its road infrastructure in the last decade, as well as improving the design standards, improving road safety, and incorporating climate resilience into the projects. With the joint support of ADB and our international financing partners, the government has recently completed the Rikoti section of the East–West Highway - one of the country`s most important mobility arteries. We are also advancing upgrades across key transport corridors, including the construction of the new Batumi–Sarpi road, and the earlier bypass projects – Kobuleti and Batumi bypasses, which together strengthen Georgia`s role along the CAREC Corridor 2 and enhance its position as a regional logistics hub.

There has also been progress on the institutional side, including improved project planning and management, and optimized asset management. These efforts will combine to reduce lifecycle costs and ensure that investments deliver long‑term value. We continue to work with the Roads Department of Georgia to modernize its road asset management systems, providing support for a low-carbon transition and improving road safety awareness.

However, modernization is not complete. The shift from building infrastructure to managing and optimizing networks - through maintenance, digital systems, and logistics efficiency - is the next stage. ADB therefore sees Georgia entering a more advanced phase, where technology, data, and inter‑modal integration become increasingly important", - reads the interview, published by the Business Insider Georgia.