Executive summary
The first-quarter 2026 data raises an important question for Georgia’s economy: does foreign capital enter the same sectors where the local economy creates real value, or are the structure of FDI and the structure of domestic business growth partly misaligned?
In the sectoral structure of foreign direct investment, the largest share goes to financial and insurance activities – 46.1%. Real estate ranks second with 18.0%, while information and communication ranks third with 13.7%. Together, the three largest sectors account for 77.8% of total FDI.
At the same time, the structure of business sector output shows a different picture. Manufacturing leads with 19.5%. Trade follows with 16.7%, construction with 13.6%, information and communication with 11.7%, and transportation and storage with 9.5%.
This comparison shows that FDI and local real economic activity do not fully overlap. Foreign capital is more concentrated in finance, real estate and ICT, while output is strongly driven by manufacturing, trade, construction, ICT and transportation. The clearest point of overlap is information and communication – ICT – a sector that appears both among the top three recipients of FDI and among the top five sectors in local output.
BTU researchers assess that Georgia’s main task is to connect foreign capital more effectively with the sectors that create local value, jobs, productivity, exports, regional activity and technological capacity.
investment and real growth are not always the same
In the economy, we often hear two separate stories. One story is about foreign investment – how much capital entered the country, where it came from and which sectors received it. The second story is about local business – where output is created, where turnover grows, where employment is concentrated and which sectors create real value.
Ideally, these two stories should overlap. Foreign capital should enter the sectors where the economy is deepening, productivity is rising, export potential is appearing and local businesses are becoming stronger.
In practice, this does not always happen. Foreign investors may prefer finance, real estate or high-return services, while local economic value may be created in other areas – manufacturing, construction, transportation, trade or regional business activity.
This is why the key question is: is FDI strengthening Georgia’s real economic growth, or is it moving partly in a parallel space?
What the FDI sectoral picture shows
In the first quarter of 2026, the sectoral distribution of FDI was highly concentrated. Financial and insurance activities received USD 125.1 million, accounting for 46.1% of total FDI. Real estate received USD 48.8 million, or 18.0%. Information and communication received USD 37.2 million, or 13.7%.
This means that almost four-fifths of foreign direct investment was concentrated in only three sectors. These sectors are certainly important for Georgia’s economy. Finance creates capital movement and credit infrastructure. Real estate is linked to construction, assets, tourism and commercial infrastructure. ICT is the foundation of the digital economy, AI, data services and technological productivity.
But this concentration also shows that foreign capital is not yet widely spread across all the sectors that create real value in the local economy.
What the local business output structure shows
The structure of business sector output shows a different picture. Manufacturing ranks first with 19.5%. This sector creates real products, local value, technical skills, regional jobs and export potential.
Trade ranks second with 16.7%. Trade is the large everyday network of the economy, connecting consumers, imports, distribution, small businesses and the domestic market.
Construction ranks third with 13.6%. Construction creates infrastructure, residential and commercial assets, employment and demand for construction materials, transportation and services.
Information and communication ranks fourth with 11.7%. This sector is especially important because it appears both among the top FDI recipients and the leading local output sectors.
Transportation and storage ranks fifth with 9.5%, reflecting Georgia’s logistics, transit and regional connectivity potential.
This picture shows that local value creation is more diverse than the FDI structure.
Where FDI and local growth overlap
The clearest overlap is in ICT. Information and communication ranks third in the FDI structure with 13.7% and fourth in business sector output with 11.7%. This means that ICT both attracts foreign capital and creates local economic value.
This is an especially important opportunity for Georgia. ICT can become the bridge where foreign capital directly aligns with local growth. If the sector connects with AI, data infrastructure, cybersecurity, Georgian-language technological resources, digital services and business transformation, it can become a new economic niche for Georgia.
A second partial overlap may exist between real estate and construction. FDI enters real estate, while construction is one of the leading sectors in local output. This connection matters, but its quality depends on whether real estate investment creates real infrastructure, tourism and business opportunities, or mainly strengthens the asset market.
A third possible overlap is the connection between finance and the financing of local business. FDI in finance does not directly create products, but if it turns into accessible credit, investment products, SME financing and mechanisms for business growth, financial investment can strengthen the real economy.
Where the mismatch appears
The largest mismatch is visible in manufacturing. Manufacturing leads local business sector output with a 19.5% share, but it does not appear among the top three FDI sectors. This means that the sector creates important local value, but the main flow of foreign capital is not yet directed toward production.
This is a strategic challenge for Georgia. If the country aims to strengthen the real economy, increase exports and support regional employment, it needs more high-quality FDI in manufacturing.
The second mismatch is trade. Trade ranks second in output, but does not dominate the main FDI sectors. This is partly natural because much of trade is based on local SMEs, imports and distribution. However, if foreign capital strengthens modern logistics, e-commerce, supply chains and trade infrastructure linked to local production, trade productivity can increase.
The third mismatch is transportation and storage. It accounts for 9.5% of local output but is not among the top three FDI sectors. Given Georgia’s geographic position, this may represent an important opportunity – especially if the country wants to strengthen its function as a regional transit and logistics hub.
Why this matters for Georgia
For a country, foreign capital becomes strategic only when it connects with local economic value. FDI may be a large amount of money, but if it does not create productivity, jobs, technology, exports and links with local business, its impact remains limited.
Georgia needs a new question for FDI: not only how much capital came in, but what did this capital connect to?
Did it connect to production?
Did it connect to local suppliers?
Did it connect to the regional economy?
Did it connect to digital transformation?
Did it connect to exports?
Did it connect to SME growth?
If the answer is yes, FDI becomes an instrument of real economic transformation. If not, it may remain a financial flow concentrated in a few sectors.
Where the opportunity is
Georgia’s main opportunity is to connect FDI with local growth sectors.
First, manufacturing. Manufacturing leads local output. It needs foreign capital, technology, quality standards, export knowledge and links to global value chains.
Second, ICT. This is the strongest point of overlap. The sector both attracts FDI and creates local output. It can become a strong platform for AI, data services, cybersecurity, digital education and Georgian AI.
Third, logistics and transportation. Georgia’s geographic position can be used better if FDI moves not only into real estate, but also into warehouses, logistics centers, transportation services and digital supply chains.
Fourth, qualitative development of construction. If FDI in real estate connects with green buildings, hotel infrastructure, business centers, regional tourism facilities and local construction materials, its effect will be broader.
Fifth, turning finance into a real-economy enabler. Capital entering finance should connect with SME financing, innovative products, industrial credit and regional business.
Where the risks are
The main risk is a mismatch between FDI and local growth. If foreign capital remains mainly in finance, real estate and several service sectors, while a large share of real value is created in manufacturing, transportation, trade and regional business, the economic effect will not be fully used.
The second risk is sectoral concentration. 77.8% of FDI is concentrated in three sectors. This increases dependence on a few directions and reduces diversification.
The third risk is underinvestment in manufacturing. If manufacturing is strong locally but foreign capital does not connect with it, Georgia may struggle to develop export-oriented industry.
The fourth risk is that regions are left out. If FDI and local growth remain concentrated mainly in the capital, regional economies will stay weak.
What Georgia should consider
Georgia should move from assessing FDI by volume to assessing FDI by alignment. The question should not only be “how much investment came in,” but “where did this investment match the country’s real growth?”
Several questions are important:
- Which sectors create the most local value?
- Which sectors receive FDI?
- Where is the overlap?
- Where is the mismatch?
- In which sectors can foreign capital increase productivity?
- How will FDI connect with local SMEs?
- How will investment increase exports?
- How will it create regional jobs?
These questions determine whether FDI will strengthen Georgia’s real economic growth.
Why this matters for Georgia
The quality of FDI is directly connected to Georgia’s economic development model. If foreign capital mainly enters sectors that strengthen capital movement, assets or limited services, deep structural change will be slow.
If FDI enters or connects with manufacturing, ICT, logistics, local suppliers, regions and exports, foreign capital becomes a real development instrument.
Put simply, Georgia needs not only more FDI, but better-connected FDI – capital that aligns with local growth.
BTUAI assessment
BTUAI assesses that the first-quarter 2026 data shows both partial alignment and partial mismatch between foreign capital and local economic value.
The strongest alignment is in ICT: the sector is both a significant recipient of FDI and one of the leading sectors in business sector output. This is a strategic opportunity for Georgia because ICT can become the foundation for the digital economy, AI, data infrastructure and technology services.
The most important mismatch is in manufacturing. Production leads local output, but the main FDI flows are not fully connected with it. If Georgia aims to strengthen the real economy and export-oriented growth, attracting high-quality foreign capital into manufacturing should become one of the main priorities.
The main conclusion is this: FDI will be most valuable for Georgia when it aligns with the real growth of the local economy – manufacturing, ICT, logistics, exports, regions and stronger small and medium-sized businesses.
Key findings
- The largest share of FDI goes to financial and insurance activities – 46.1%.
- Real estate accounts for 18.0% of FDI.
- Information and communication accounts for 13.7% of FDI.
- Manufacturing leads business sector output with 19.5%.
- Trade accounts for 16.7% of output.
- Construction accounts for 13.6%, ICT for 11.7%, and transportation and storage for 9.5%.
- FDI and local output align most clearly in ICT.
- The most important mismatch is in manufacturing: a locally strong sector is not among the top three FDI recipients.
- Georgia needs to connect FDI more closely with local value, exports, regional development and SMEs.
Data snapshot
FDI in financial and insurance activities – USD 125.1 million.
Share of financial and insurance activities in FDI – 46.1%.
FDI in real estate – USD 48.8 million.
Share of real estate in FDI – 18.0%.
FDI in information and communication – USD 37.2 million.
Share of information and communication in FDI – 13.7%.
Share of three largest FDI sectors – 77.8%.
Manufacturing share in business sector output – 19.5%.
Trade share in output – 16.7%.
Construction share in output – 13.6%.
Information and communication share in output – 11.7%.
Transportation and storage share in output – 9.5%.
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, the first-quarter 2026 sectoral structure of FDI is compared with the structure of business sector output. The analysis assesses how closely foreign capital aligns with the sectors that create real value in the local economy.
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 one quarter and is not sufficient to determine a long-term trend. Sustainable conclusions require multi-quarter and multi-year analysis.
FDI sectoral structure and business sector output structure are different statistical categories. Their comparison shows economic alignment or mismatch, but does not establish direct causality.
Sources
National Statistics Office of Georgia – “Foreign Direct Investment in Georgia, First Quarter of 2026, Preliminary Data.”
National Statistics Office of Georgia – “Results of Enterprise Activity, First Quarter of 2026.”
BTUAI analytical processing for the context of FDI sectoral structure, local business output, economic diversification, ICT, manufacturing, logistics and real economic growth.
Frequently asked questions
Why is it important to compare FDI and local business?
Because foreign capital is most valuable when it connects with sectors that create productivity, jobs, exports and local economic value.
Where is the strongest alignment?
The strongest alignment is in ICT. Information and communication is both a significant FDI recipient and one of the leading sectors in business sector output.
Where is the most important mismatch?
In manufacturing. Manufacturing leads local output, but it is not among the top three FDI sectors.
Is FDI in finance negative?
No. Finance is important, but its impact becomes stronger when capital connects with the real economy – SMEs, manufacturing, regional business and innovation.
What should Georgia’s task be?
Georgia should attract not only more FDI, but FDI that aligns with local economic growth and strengthens manufacturing, ICT, logistics, exports and regions.
Keywords
foreign direct investment; Georgia FDI; local business; business sector output; Georgian economy; manufacturing; ICT; finance; real estate; trade; construction; transportation; logistics; real economy; economic diversification; BTUAI; Business and Technology University; local business growth.
Citation format
BTUAI Research Team. “FDI and Local Business Together: Where Does Foreign Capital Match Georgia’s Real 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.