How Important Are Money Transfers for Georgia’s Economy?

Money transfers play a crucial role in Georgia’s economy, but how significant is this impact? To put it into perspective, we can compare it to the country’s Gross Domestic Product (GDP). In 2024, funds sent by Georgians living abroad accounted for approximately 10.2% of Georgia’s economy. This means that nearly every tenth lari circulating in economic activities comes from remittances.

Historically, money transfers have been one of the most important sources of income not only for individual households but also for the country as a whole. In 2024, Georgia received $3.36 billion in remittances (source: National Bank of Georgia), fueling both consumer spending and investment activities. However, in recent years, there have been notable changes in the sources of these funds.

Although the U.S., Italy, and Germany remain the primary sources of remittances, the key question is how dependent Georgia is on these inflows. For comparison, in Moldova, Tajikistan, and Kyrgyzstan, remittances account for 15-30% of GDP, making these economies highly vulnerable to fluctuations in money transfers. While Georgia’s 10% share is relatively lower, it remains significant—especially considering that it accounts for approximately 14% of the country’s total foreign trade turnover (imports + exports).

In 2024, the volume of remittances decreased by 18%, primarily due to a 65% drop in transfers from Russia. Nevertheless, inflows from European Union countries continue to grow, possibly reflecting a new migration trend—Georgians are increasingly moving to Western Europe and North America, where they find better employment opportunities.

The high share of remittances highlights the fact that Georgia’s economy heavily relies on the labor of emigrants. The main question is whether Georgia can utilize these funds more strategically—for example, by fostering business development, improving education, or investing in infrastructure projects. Otherwise, any major decline in remittances could have a significant negative impact on the country’s economy.