Georgia’s Exports Are Growing Fast – But the Trade Deficit Remains

Key Takeaway

Georgia’s merchandise trade turnover reached USD 17.9 billion in January–August 2026. Exports rose to USD 5.42 billion, up 22.1% year on year, while imports increased only 3.3% to USD 12.49 billion. The trade deficit therefore narrowed to USD 7.07 billion.

The direction is encouraging: exports are growing much faster than imports. According to calculations by BTU researchers, exports covered about 43.4% of imports in the first eight months of 2026, up from roughly 36.7% a year earlier. Yet imports were still about 2.3 times the value of exports. Georgia is closing part of the gap, not eliminating it.

The deficit is narrowing from a very high base

In January–August 2025, Georgia exported about USD 4.44 billion of goods and imported about USD 12.09 billion. In the same period of 2026, exports increased by roughly USD 980 million, while imports rose by only about USD 400 million. That difference in pace reduced the merchandise trade deficit by approximately USD 580 million.

According to calculations by BTU researchers, the export-to-import coverage ratio improved from 36.7% to 43.4%, a gain of about 6.7 percentage points. The deficit’s share of total merchandise trade turnover also fell from about 46.3% to 39.5%. Geostat’s express release reports the 2026 share at 39.5%.

These ratios tell a more complete story than the 22.1% export-growth headline alone. Exports can grow very quickly while a large deficit remains if imports start from a much higher level. Georgia’s data show exactly that pattern.

Why a 22.1% export jump still leaves a large deficit

Imports exceeded exports by about USD 7.07 billion in the first eight months of 2026. Put differently, the value of imported goods was approximately 2.30 times the value of exports. The country is therefore moving in a better direction, but the absolute imbalance remains large.

A merchandise trade deficit is not automatically evidence of economic weakness. A small open economy may import capital equipment, intermediate inputs, energy and consumer goods that support production and consumption. The more important structural question is whether export capacity, domestic production and value added are expanding fast enough to make external trade more balanced over time.

There is also an important methodological caveat. Georgia’s headline export figure includes re-exports. The January–August 2026 express release does not yet provide a complete domestic-export figure for the same period. The 22.1% rise in total exports therefore cannot be interpreted as a 22.1% increase in goods produced in Georgia. Detailed commodity and domestic-export data are needed before making that claim.

Strong monthly exports still sit below imports

Geostat’s monthly series show exports at about USD 793.9 million in July 2026 and USD 752.4 million in August, while imports were roughly USD 1.75 billion and USD 1.55 billion respectively. Even in strong export months, the absolute value of imports remains substantially larger.

The 2026 deficit is smaller than in January–August 2025, but it is still above the roughly USD 6.61 billion deficit recorded over the same months of 2024. This matters because part of the year-on-year improvement comes from comparison with an unusually wide deficit in 2025.

A merchandise deficit is not the same as the current-account deficit

The merchandise trade balance captures only goods. The National Bank of Georgia’s Q1 2026 balance-of-payments release shows why the distinction matters: the current-account deficit improved to USD 348.1 million, or 3.8% of quarterly GDP, as services and current transfers offset part of the goods deficit.

This does not make the goods gap unimportant. It means the USD 7.07 billion January–August merchandise deficit should not be read as an equivalent overall external-financing gap. Georgia also earns foreign currency through services such as travel, transport and computer and information services.

One year of improvement is not yet a multi-year reversal

The year-on-year comparison is strong, but a longer view explains why the result still needs caution. In January–August 2023, exports were about USD 4.07 billion, imports USD 10.20 billion and the merchandise deficit USD 6.13 billion. The gap widened to roughly USD 6.61 billion in the same period of 2024 and USD 7.65 billion in 2025. In 2026 it narrowed to USD 7.07 billion, but remained larger than in either 2023 or 2024.

The export-coverage ratio tells a more encouraging story. Exports covered about 39.9% of imports in January–August 2023, 38.7% in 2024, 36.7% in 2025 and 43.4% in 2026. On this measure, 2026 is the strongest of the four comparable January–August periods. The contrast is important: the trade ratio has improved sharply, but the absolute deficit remains large because Georgia’s import base has expanded substantially.

This is the central paradox in the 2026 numbers. Georgia is moving in a better direction, but from a much larger import base than several years ago. Sustained improvement therefore requires more than one year of rapid export growth: it requires that export momentum persist and that more domestic value be embedded in what the country sells abroad.

The Q1 balance-of-payments data also illustrate the role of services. The National Bank of Georgia reported a services surplus of USD 876.1 million in the first quarter of 2026. Computer and information services exports alone reached USD 441.3 million, up 65.7% year on year. The periods and statistical frameworks are different, so these figures cannot be netted directly against the January–August merchandise deficit; they simply show why Georgia’s overall external position is broader than its goods balance.

Export quality matters as much as export speed

The 22.1% headline also raises a composition question. Georgia’s total exports include both domestically produced goods and re-exports. Re-export activity can create commercial, logistics and service income and reinforce Georgia’s regional trading role, but it has different implications for domestic manufacturing, productivity and supplier development than exports whose value is created largely inside the country.

That is why the detailed September release matters. A broad-based increase across domestic products and markets would be a stronger structural signal than growth concentrated in a small number of re-exported goods or destinations. The next analytical step is therefore to separate the speed of export growth from its domestic value-added content and market concentration.

What this means for Georgian business

For Georgian companies, the strongest positive signal is the speed of export growth. If the increase is confirmed in domestic exports rather than being driven mainly by re-exports, it could indicate stronger production scale, foreign-currency revenues and access to external markets.

But many Georgian firms are also import-dependent, relying on machinery, components, raw materials or finished goods. A sustainable improvement in the trade balance therefore does not come from mechanically suppressing imports. It comes from building exports with higher domestic value added, stronger productivity and broader market diversification.

According to an assessment by BTU researchers, the key message from the first eight months of 2026 is not that Georgia has solved its trade deficit. It is that two favourable movements are occurring at the same time: exports are expanding rapidly while import growth is comparatively moderate. If this gap in growth rates persists and domestic exports also strengthen, the structural balance of merchandise trade can gradually improve.

What the next data release needs to answer

The current express release provides the headline volumes but not the full answer on the quality of growth. Geostat states that detailed January–August merchandise trade data are scheduled for release on September 21. Those figures should make it possible to assess product groups, trading partners and the composition of export growth more precisely.

Three questions will be especially important: how much of the export increase comes from domestic exports versus re-exports; which product categories generated the additional export value; and how concentrated the growth is across products and markets. Those details will determine whether the improvement is broad and durable or driven by a small number of fast-growing channels.

Conclusion

Georgia is selling more goods abroad in 2026, and exports are growing much faster than imports. That is a meaningful positive signal. Export coverage of imports improved from roughly 36.7% to 43.4%, and the trade deficit narrowed by about USD 580 million year on year.

But selling more is not the same as selling as much as the country buys. Imports remained about 2.3 times larger than exports, leaving a USD 7.07 billion merchandise trade deficit. The next test is therefore not only whether exports keep growing, but whether domestic, higher-value-added exports expand and the gap between foreign sales and purchases continues to narrow sustainably.

Data and Main Sources

National Statistics Office of Georgia (Geostat) – External Merchandise Trade of Georgia, January–August 2026, Express Release, September 14, 2026.

National Statistics Office of Georgia (Geostat) – External Merchandise Trade data module, including preliminary January–August 2026 values and annual historical series.

The 2025 and 2024 January–August comparisons use Geostat’s official monthly trade series. Geostat states that detailed January–August 2026 merchandise trade data are scheduled for September 21.

Prepared by the academic team of Business and Technology University and the BTUAI Research Team, Tbilisi, Georgia.