Demographic Changes in Georgia: Analysis of Economic Implications

As of January 1, 2025, Georgia’s population stood at 3.7 million, which is 9.9 thousand more compared to the previous year (source: Geostat). The growth was mainly driven by a positive net migration balance of 14,386, while natural population change remained negative at -4,488.

Children (ages 0-14) account for 19.2 percent of the total population, while the working-age population (ages 15-64) makes up 64.2 percent. This distribution is currently considered favorable, as the labor market still maintains a solid base and the economy has room for growth. However, the relatively small share of children signals a weakening renewal of the future workforce. If this trend continues, a decline in the working-age population over the coming decades will become inevitable, putting increasing pressure on both the economy and the social systems.

The economic impact of this situation is multifaceted. One of the first major consequences is labor market contraction: low natural population growth means that the number of working-age individuals will steadily decline. This will put pressure on production capacity and innovation. Companies facing labor shortages may be forced either to adopt automation more rapidly or to compete for workers by offering higher wages, creating significant challenges especially for small and medium-sized businesses.

Another key challenge is the strain on social protection systems. An aging population drives up costs for pensions and healthcare. If the pace of economic growth does not accelerate significantly, the state may be forced to either reallocate budget priorities or increase taxes.

Migration currently helps balance the situation somewhat: in 2024, more people immigrated into Georgia than emigrated. However, most immigrants are of working age, and their integration, education, and professional skills will greatly influence their real economic contribution. This raises an important question: how prepared is Georgia to effectively harness the potential of migration?

Finally, the need for productivity growth becomes crucial. If the number of workers declines, the only way for the economy to maintain momentum is to increase the value created per worker. This demands reforms in the education system, the strengthening of technological skills, and innovative business transformation.

Today, Georgia’s demographic data is not just a set of numbers—it is a clear signal about the opportunities and risks for future economic development. How the country prepares for these changes will determine its success over the coming decades.