Economic development of the municipalities (outside capital) is one of the key sustainable development challenges in Georgia. The capital city of Tbilisi, while accounting for nearly 1/3 of the country’s population generates 50% of GDP and keeps expanding, whereas the municipalities, with few exceptions, are losing population and suffering from high incidence of poverty, unemployment, and slow and weak economic development.

This policy brief examines the role of business confidence as a predictor of economic development. It focuses on the impact of recent political instability and economic uncertainty, drawing insights from both Georgian data and international experience.

The relationship between social assistance programs and electoral outcomes has gathered significant attention in both academic and policy circles, especially in the last decade. Social assistance programs, designed to support vulnerable populations, often carry political implications, particularly in developing democracies where incumbent governments may leverage these programs to secure voter loyalty.

This note provides an overview of recent developments regarding Georgia’s foreign exchange Gross International Reserves (GIR), offers insights into some aspects of reserve adequacy, and central bank’s safeguards principles in the context of heightened political uncertainties. It appears that the GIR are likely inadequate to withstand prolonged political uncertainties. Furthermore, the National Bank of Georgia's (NBG) governance and regulatory frameworks are not presently equipped to counter these challenges.

The political and social turmoil surrounding the 26 October parliamentary elections and their aftermath have significant implications for Georgia's business environment. The prolonged polarization, government-led violence against protesters, and the suspension of EU accession talks create uncertainty that can negatively influence the economic climate in multiple ways.

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury recently imposed sanctions on Bidzina Ivanishvili, the billionaire widely regarded as Georgia's de facto ruler and the honorary chair of the Georgian Dream party. These measures, which include asset freezes and travel bans, aim to address democratic backsliding in Georgia and Ivanishvili's personal role in the country's perceived drift toward Russian influence.