Repercussions of Democratic Backsliding and Geopolitics on Georgia’s Economy

Author

Tinatin Akhvlediani
Tinatin Akhvlediani is a Researcher at CEPS’ Foreign Policy unit. Her expertise and publications are focused on ICT and trade. Her geographic area of expertise is Central and Eastern European Countries and Eastern Partnership with a specific focus on the EU’s Association Agreements with Georgia, Moldova and Ukraine. Apart from research, Tinatin is also co-teaching a master’s degree course on International Trade Policy at the University of Warsaw.Tinatin holds a PhD degree in Economics from the University of Warsaw, Master’s degrees in International Economics from the University of Warsaw and European Economic Studies from the College of Europe and a Bachelor’s degree in Economics from Tbilisi State University.Before joining CEPS, she worked as a research assistant at the Digital Economy Lab, jointly established by the University of Warsaw and Google, and as an academic assistant at the College of Europe. Since 2017, Tinatin is leading a research project granted by the National Science Centre of Poland on ICT and trade in Central and Eastern Europe. On this topic, she conducted research visits at Indiana University in the United States, Vienna Institute of International Economic Studies in Austria and Shanghai University in China. Her research outcomes have been presented at the international conferences in Europe as well as in Canada, the United States, China and Australia.
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Author

Tinatin Akhvlediani
Tinatin Akhvlediani is a Researcher at CEPS’ Foreign Policy unit. Her expertise and publications are focused on ICT and trade. Her geographic area of expertise is Central and Eastern European Countries and Eastern Partnership with a specific focus on the EU’s Association Agreements with Georgia, Moldova and Ukraine. Apart from research, Tinatin is also co-teaching a master’s degree course on International Trade Policy at the University of Warsaw.Tinatin holds a PhD degree in Economics from the University of Warsaw, Master’s degrees in International Economics from the University of Warsaw and European Economic Studies from the College of Europe and a Bachelor’s degree in Economics from Tbilisi State University.Before joining CEPS, she worked as a research assistant at the Digital Economy Lab, jointly established by the University of Warsaw and Google, and as an academic assistant at the College of Europe. Since 2017, Tinatin is leading a research project granted by the National Science Centre of Poland on ICT and trade in Central and Eastern Europe. On this topic, she conducted research visits at Indiana University in the United States, Vienna Institute of International Economic Studies in Austria and Shanghai University in China. Her research outcomes have been presented at the international conferences in Europe as well as in Canada, the United States, China and Australia.
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Publish Date:
2025-04-14 13:16:58

Georgia’s economic performance has come under growing strain in recent years, shaped by both internal political turbulence and mounting geopolitical tensions. The ongoing war in Ukraine and its wide-ranging regional repercussions have exacerbated existing vulnerabilities in Georgia’s economy. Domestically, the country is grappling with increasing political instability, marked by democratic backsliding, stalled European integration, and persistent public protests. These developments have significantly eroded investor confidence, prompted a decline in financial support from its allies, including the EU and other international partners, and injected a new level of uncertainty into the country’s economic outlook.

As a small and open economy, Georgia is particularly susceptible to external shocks, and the cumulative pressures of political and geopolitical instability are further exposing the fragility of its economy. The lack of a sustainable, forward-looking economic strategy, coupled with insufficient social protection mechanisms, high unemployment, and widening inequality, further compound the country’s inability to withstand economic disruptions and mounting internal pressures.

Without a decisive course correction, Georgia risks sliding into a prolonged economic downturn. The absence of necessary reforms, coupled with continued political and geopolitical instability, could deepen structural vulnerabilities and further erode investor confidence. While some of the immediate effects may appear manageable, the consequences will be increasingly felt in the medium to long term—particularly as external support diminishes and domestic vulnerabilities intensify. Urgent steps are therefore needed to pursue a sustainable economic development policy, one that hinges on restoring its democratic path and re-aligning with its European aspirations. Only then can the country rebuild international credibility and foster a stable, attractive environment for economic activity and foreign investment.