Georgia leans on international lenders as external debt climbs

As of April 2026, Georgia’s state external debt has exceeded $9.2 billion, increasing by $183 million year-on-year, the country’s Ministry of Finance said.

The main driver of the increase is new borrowing taken by the government to finance the construction of roads, tunnels, and other infrastructure projects. One of the largest new loans was a $360 million agreement with the Asian Development Bank to build a highway and tunnel on the Batumi–Sarpi route.

In simplified terms, most of Georgia’s debt is owed not to other states, but to international financial institutions such as the World Bank, the Asian Development Bank, and the European Investment Bank, which finance large-scale projects beyond the capacity of the national budget.

The largest creditor remains the Asian Development Bank, with outstanding loans exceeding $2.5 billion. It is followed by the World Bank with around $2.3 billion, and the European Investment Bank with approximately $1.2 billion. Georgia also owes $858 million to France through the French Development Agency (AFD).

Germany is also among the top creditors, with roughly $600 million in loans. An additional half a billion dollars comes from eurobonds issued on international markets.

A separate portion of the debt is linked to the International Monetary Fund. Georgia’s National Bank owes about $295 million to the IMF, while the government accounts for an additional $157 million in obligations.

Economists typically view rising debt as a concern only when borrowed funds are used to cover budget deficits rather than for development projects. Georgian authorities argue that current borrowing is directed primarily toward infrastructure, particularly roads along the East–West international corridor, aimed at boosting transit capacity and supporting economic growth.

However, the increase in external debt makes the economy more vulnerable to fluctuations in the lari exchange rate and global interest rates, as a significant portion of liabilities is denominated in foreign currency.

By Vafa Guliyeva