Moody’s Ratings has upgraded the outlook on Georgia’s banking system to stable from negative, pointing to the country’s macroeconomic resilience and a balanced political and geopolitical risk environment.

In a newly released report, the agency said the revision reflects sustained economic momentum and strengthening financial sector fundamentals, The Caspian Post reports.

Moody’s projects real GDP growth of approximately 5.5% in 2026 and 2027, a rate expected to support continued credit expansion and maintain a favorable operating climate for banks.

The agency also emphasized that asset quality across Georgia’s banking sector is likely to remain stable. Strong economic activity and consistent growth in household incomes are expected to bolster borrowers’ repayment capacity, easing potential pressure on loan portfolios.

Capital adequacy is projected to remain solid, underpinned by strict regulatory requirements and healthy internal capital generation. Profitability is also expected to stay robust, further reinforcing overall sector stability.

Additionally, the report highlighted ongoing deposit de-dollarization and the rebuilding of foreign currency reserves by the National Bank of Georgia, developments viewed as strengthening the resilience of the country’s financial system.

Georgia’s banking system holds a Ba2 rating, placing it in the non-investment-grade category. However, the shift to a stable outlook signals Moody’s assessment that risks facing the sector are now broadly balanced over the medium term.