Georgia’s Economy Is Growing – But How? Business Turnover, Output and the Real Pace of Growth
In the first quarter of 2026, turnover in Georgia’s business sector increased by 10.7% and reached GEL 62.0 billion. Business sector output also grew – by 12.4% – reaching GEL 23.3 billion. At first glance, the picture is strong: businesses are selling more, producing more goods and services, and employment is also increasing.
But this kind of data cannot be interpreted only through the phrase “the economy is growing.” The more important question is: what kind of growth is this? Is it real productivity growth, a price effect, the result of activity in several large sectors, the dominance of large businesses, or evidence of deeper and more sustainable economic expansion?
BTU researchers assess that the first-quarter 2026 data shows a growing business sector, but the quality of growth is uneven. Turnover is high, but a large part of it is concentrated in large businesses. In output, the role of small and medium-sized enterprises is more visible, which shows that the real productive base of the economy is not limited to large companies alone. At the same time, business activity remains strongly concentrated in Tbilisi.
The main conclusion is this: Georgia’s economic growth is positive, but its sustainability depends on whether turnover growth turns into real productivity, regional development, stronger small and medium-sized businesses, technological renewal and higher-quality jobs.
Georgian context: when “turnover increased” does not tell the whole story
Business turnover growth is often read simply: companies sold more, therefore the economy grew. But turnover does not always mean deeper economic development.
A company’s turnover can expand due to several factors: rising prices, an increase in the volume of goods sold, a one-off large transaction, heightened activity from major market players, or a faster circulation of money within the sector
This is why turnover alone is not enough to understand the quality of economic growth. We also need to look at output, employment, leading sectors, the role of small and medium-sized businesses, regional distribution and signs of labor productivity improvement.
From this perspective, the first-quarter 2026 data gives us an interesting picture: growth exists, but it is still concentrated in several large sectors, large businesses and the capital city.
What happened
In the first quarter of 2026, turnover in the business sector amounted to GEL 62.0 billion, which was 10.7% higher than in the same period of the previous year. Output reached GEL 23.3 billion, representing annual growth of 12.4%.
This is important because output grew slightly faster than turnover. If turnover shows how much monetary activity is circulating through businesses, output is closer to the question of how much economic value was created.
The average number of people employed in the business sector reached 799.4 thousand, up 3.7% year-on-year. The number of hired employees amounted to 743.7 thousand, while total personnel costs reached GEL 5.319 billion, an annual increase of 11.4%.
This means that business activity is expanding not only through sales, but also through employment and labor costs. But here the key question arises: to what extent is this growth turning into productivity growth?
Turnover, output and productivity – what the difference shows
Turnover and output are not the same thing.
Turnover shows the value of goods and services sold. Output is closer to the real volume of economic activity created within the business sector.
In the first quarter of 2026, turnover increased by 10.7%, while output increased by 12.4%. This is a positive sign because faster output growth may suggest that not only is monetary circulation expanding, but productive activity is also strengthening
However, this does not yet prove full real productivity growth. Both indicators are expressed in lari, which means that price changes may also be included. If prices rise, turnover and output can increase even if the real volume of activity remains unchanged.
For this reason, the correct formulation should be cautious: the data shows growth in business activity, but to understand the real pace of the economy, additional analysis is needed – including inflation, sectoral prices, real production volumes and productivity indicators.
Still, one important signal is visible. Output per employed person increased by more than 8% in nominal terms. This may indicate an early sign of productivity improvement, although final conclusions require observation of real, price-adjusted indicators.
Large businesses dominate turnover, but small businesses matter more in output
In the first quarter of 2026, large businesses accounted for 70.8% of business sector turnover. Medium-sized businesses accounted for 11.2%, while small businesses accounted for 18.0%.
The picture is different in output. Large businesses accounted for 48.9% of output, medium-sized businesses for 23.6%, and small businesses for 27.5%.
This difference is important. Looking only at turnover, it may seem that the economy is almost entirely driven by large businesses. But output shows that small and medium-sized enterprises play a much larger role in creating real economic value than turnover alone suggests.
This leads to two conclusions for Georgia.
First, large businesses are the main carriers of monetary scale in the economy.
Second, small and medium-sized businesses are an important part of the real productive base.
If Georgia wants growth to become more inclusive and sustainable, policy should not be guided only by indicators of large businesses. It should support the productivity, technological renewal, access to finance, export capacity and management quality of small and medium-sized enterprises.
Sectors: where turnover is generated and where real output is created
In the turnover structure, the largest share in the first quarter of 2026 came from arts, entertainment and recreation – 36.8%. Trade ranked second with 31.4%. Manufacturing followed with 7.4%, construction with 4.5%, transportation and storage with 4.5%, and information and communication with 4.4%.
This shows that a large share of turnover is concentrated in sectors where monetary flows may be large, but this does not always mean an equivalent level of broad economic value, productivity improvement or employment quality.
The output structure gives a more realistic picture of economic creation. Manufacturing leads with 19.5%, followed by trade with 16.7%, construction with 13.6%, information and communication with 11.7%, and transportation and storage with 9.5%.
This difference shows why evaluating the economy only through turnover can be misleading. If we want to understand where real economic value is created, more attention should be paid to output, employment, productivity and the technological potential of sectors.
From this perspective, the growth of manufacturing is especially important. In the first quarter of 2026, manufacturing output increased by 20.8%, while turnover increased by 15.4%. This is one of the most important signals in the data, because manufacturing growth supports deeper economic development, local value creation and export potential.
Employment: jobs are increasing, but quality remains a separate question
The number of people employed in the business sector increased to 799.4 thousand. Women accounted for 44.2% of total employment, while men accounted for 55.8%.
The employment structure is led by trade, with a 29.3% share. It is followed by manufacturing at 11.4%, healthcare and social services at 9.4%, transportation and storage at 8.1%, construction at 7.5%, information and communication at 6.3%, and accommodation and food services at 5.5%.
This shows that a large share of jobs in Georgia’s business sector depends on trade. Trade is an important sector, but employment based largely on trade cannot by itself ensure structural deepening of the economy. For long-term high-quality growth, Georgia needs more jobs in manufacturing, technology, logistics, professional services and high value-added sectors.
The wage picture also gives an important signal. The average monthly wage in the business sector was GEL 2,335.9. For women, the average monthly wage was GEL 1,837.6. By enterprise size, the highest average wage was recorded in medium-sized businesses – GEL 2,786.5. Large businesses followed with GEL 2,513.5, while small businesses recorded GEL 1,787.2.
This shows that employment growth is important, but the quality of the economy should also be assessed through wages, productivity, job stability and gender differences.
Regional picture: the economy is still heavily centered on Tbilisi
In the first quarter of 2026, Tbilisi accounted for 80.8% of total business sector turnover. Its share in total output was 65.7%. Tbilisi also led in employment, with 65.4% of business sector employees.
This is one of the most important structural challenges of Georgia’s economy. The capital is the main center of business, finance, services, large companies, talent and infrastructure. But when such a large share of economic activity is concentrated in one city, regions remain in a weaker position.
This has two consequences.
First, economic opportunities in the regions remain limited, increasing internal migration, labor movement and dependence on the capital.
Second, the benefits of growth become less inclusive. If regions do not create enough business activity, local production, services and employment, the gains from economic growth are distributed unevenly.
For Georgia, the next stage of economic growth should therefore be not only higher turnover, but stronger regional economic life.
Price effect or real growth?
Business turnover and output growth are measured in lari. This means that the data may include both real volume growth and price effects.
If a company sells the same quantity of goods at higher prices, turnover increases. If production costs, prices and service values rise, output may also increase in nominal terms. Therefore, nominal growth does not automatically mean real growth.
However, several positive signs are visible in the first-quarter 2026 data:
Output grew faster than turnover.
Employment increased.
Personnel costs increased.
Manufacturing output grew significantly.
Growth was recorded in accommodation and food services, transportation, professional services, healthcare and education.
This means that growth cannot be explained only by price effects. Still, to determine the real economic pace, deeper analysis of inflation-adjusted indicators and sectoral productivity is necessary.
What this means for business
For businesses, the main message is this: the market is growing, but competition and structural differences are also becoming more important.
Large businesses have scale, capital and a dominant share of turnover. Small and medium-sized businesses play an important role in output, employment and local economic networks.
For businesses, this means that sales growth alone will not be enough in the next stage. Productivity, digital tools, operational cost control, workforce development, expansion into regional markets and stronger links with local suppliers will become increasingly important.
Technological support is especially important for small and medium-sized businesses. If small businesses create almost one-third of output but lag behind in wages and resources, strengthening them will directly improve the overall quality of the economy.
What this means for the state
For the state, the data shows that the economy is growing, but the structure of growth requires policy attention.
The first task is regional diversification. If more than 80% of turnover is concentrated in Tbilisi, regional economic policy should become one of the main priorities.
The second task is productivity of small and medium-sized businesses. Small businesses have a significant share in output, but lower wages and limited resources show that they need technological, financial and managerial support.
The third task is strengthening production. The 20.8% growth in manufacturing output is a positive signal that should be deepened through industrial policy, export support and workforce development.
The fourth task is data-based economic policy. Turnover growth alone should not be the measure of success. More precise assessment is needed of productivity, real output, regional distribution, wage quality and sectoral value creation.
Why this matters for Georgia
For Georgia, the main challenge of economic growth is no longer only achieving growth. The main challenge is the quality of growth.
The country needs an economy that not only circulates more money, but creates more value; not only grows in the capital, but develops business activity in the regions; not only relies on trade, but strengthens manufacturing, technology, logistics, education and professional services.
If growth is concentrated mainly in several sectors, large businesses and Tbilisi, its benefits are distributed in a limited way. If growth moves toward productivity, small and medium-sized businesses, regions and high value-added sectors, then it becomes more sustainable.
Therefore, the main question raised by the first-quarter 2026 data is not only “how much did the economy grow?” The real question is: what kind of economy is growing in Georgia?
BTUAI assessment
BTUAI assesses that the first-quarter 2026 business sector data creates a positive but complex picture for Georgia’s economy. Growth in turnover and output shows that business activity is expanding. Employment growth indicates that economic activity is also reflected in the labor market.
But this growth still requires qualitative interpretation. A large share of turnover is concentrated in large businesses and several sectors. Regional concentration remains high. Small and medium-sized businesses play an important role in output, but gaps in wages and resources remain.
BTU researchers assess that the next task for Georgia’s economy is not only to maintain growth, but to turn growth into real productivity. This means more technology in business, stronger manufacturing, greater regional activity, more opportunities for small and medium-sized businesses and higher-quality jobs.
The main conclusion is this: Georgia’s economy is growing, but the sustainability of this growth depends on whether it becomes more productive, diversified and regionally balanced.
Key findings
- In the first quarter of 2026, business sector turnover increased by 10.7% and reached GEL 62.0 billion.
- Output increased by 12.4% and reached GEL 23.3 billion.
- Output grew slightly faster than turnover, which is a stronger qualitative signal, although price effects must be excluded to determine real growth.
- Large businesses accounted for 70.8% of turnover, but the role of small and medium-sized businesses is stronger in output.
- Small businesses accounted for 27.5% of output, showing their real economic importance.
- Employment in the business sector increased to 799.4 thousand.
- Trade accounted for the largest share of employment – 29.3%, showing structural dependence on the sector.
- Tbilisi accounted for 80.8% of turnover, 65.7% of output and 65.4% of employment, confirming high regional concentration.
- Georgia’s main challenge is to turn growth into productivity, regional development and high value-added sectors.
Data snapshot
Business sector turnover in the first quarter of 2026 – GEL 62.0 billion.
Turnover growth compared with the same period of the previous year – 10.7%.
Business sector output – GEL 23.3 billion.
Output growth – 12.4%.
Total purchases by enterprises – GEL 29.5 billion.
Purchases of goods and services intended for resale – GEL 17.9 billion.
Average number of people employed in the business sector – 799.4 thousand.
Employment growth – 3.7%.
Number of hired employees – 743.7 thousand.
Personnel costs – GEL 5.319 billion.
Average monthly wage in the business sector – GEL 2,335.9.
Average monthly wage for women – GEL 1,837.6.
Large businesses accounted for 70.8% of turnover.
Medium-sized businesses accounted for 11.2% of turnover.
Small businesses accounted for 18.0% of turnover.
Large businesses accounted for 48.9% of output.
Medium-sized businesses accounted for 23.6% of output.
Small businesses accounted for 27.5% of output.
Tbilisi’s share in turnover – 80.8%.
Tbilisi’s share in output – 65.7%.
Tbilisi’s share in employment – 65.4%.
Manufacturing output growth – 20.8%.
Trade’s share in employment – 29.3%.
Methodology
This report was prepared as part of BTUAI Research. The analysis is based on demographic, regional, economic and behavioral data, as well as general trends observed in publicly available sources. The materials are processed using analytical methods applied by BTU researchers, with the support of BTUAI.
The purpose of the research is not to provide personal assessments, but to identify broader trends and practical directions for business, education and society.
In this specific material, data on enterprise activity in the first quarter of 2026 is analyzed in the context of business sector turnover, output, employment, sectoral structure, enterprise size, regional concentration and the quality of economic growth.
Limitations
This material is analytical and educational in nature. It does not constitute financial, investment, legal, tax or individual business decision-making advice. Before making specific decisions, consultation with a relevant specialist is required.
The data reflects nominal indicators of the business sector and is not fully adjusted for price changes. Therefore, to assess the real pace of economic growth, inflation and sectoral price dynamics must also be considered.
One quarter of data is not sufficient to determine a long-term trend. Sustainability assessment requires annual, multi-quarter and sectoral analysis.
Sources
National Statistics Office of Georgia – “Results of Enterprise Activity, First Quarter of 2026.”
BTUAI analytical processing for evaluating Georgia’s business sector growth, productivity, regional concentration, the role of small and medium-sized businesses and the structure of the economy.
Frequently asked questions
Does 10.7% turnover growth mean that the economy grew by the same amount in real terms?
Not necessarily. Turnover is a nominal indicator and is affected by price changes. To understand real growth, inflation and sectoral price effects must be considered.
Why is output important?
Output better shows how much economic value was created in the business sector. If output grows faster than turnover, this may be a stronger qualitative signal for business activity.
Why does the share of small business in output matter?
Because small businesses have a smaller share in turnover but a larger role in output. This shows their real economic importance.
What is the main regional problem?
Business activity remains highly concentrated in Tbilisi. The capital accounts for 80.8% of turnover, 65.7% of output and 65.4% of employment.
What should be the main goal of economic policy?
The main goal should be improving the quality of growth – more productivity, stronger regional activity, stronger small and medium-sized businesses, more manufacturing and high value-added sectors.
Keywords
Georgian economy; business sector; business turnover; output growth; economic growth; real growth; productivity; small and medium-sized businesses; regional economy; Tbilisi; employment; wages; manufacturing; BTUAI; Business and Technology University; SME sector; regional concentration.
Citation format
BTUAI Research Team. “Georgia’s Economy Is Growing – But How? Business Turnover, Output and the Real Pace of Growth.” Business and Technology University, BTUAI.ge, 2026.
Prepared by the academic team of Business and Technology University and the BTUAI Research Team.
Tbilisi, Georgia
BTUAI is an analytical platform of Business and Technology University that studies the impact of artificial intelligence, digital transformation, innovation, startup ecosystems, data analytics and emerging technologies on business, the economy, education and society. BTUAI materials are designed to explain complex technological and economic changes in a clear, reliable and Georgia-focused way.