The EU Business Climate Report Georgia 2024 reveals that businesses in Georgia are facing several challenges that could hinder long-term economic stability. The report, based on feedback from up to 200 European companies, highlights issues such as political instability, workforce shortages, and currency fluctuations.

Key findings include:

• Political Instability: 76.7% of companies cite political uncertainty, driven by the stalled EU accession process and upcoming elections.
• Workforce Deficit & Skills Gap: Nearly half of companies report a skills shortage, leading to a 5-40% underperformance and an annual GDP loss of 26%.
• Exchange Rate Fluctuations: Ongoing currency instability continues to disrupt financial planning and investment decisions.
• Corruption & Regulatory Inefficiencies: Businesses are concerned about tax policies, public procurement, and the judicial system.

The report also underscores the severe impact of workforce shortages, which have led to a 55.6 billion GEL income loss across businesses. High emigration and mismatched education programs exacerbate this issue, although investing in workforce training has shown positive returns.

The EU remains Georgia's largest trade partner, but exports fell by 18% in 2023, partly due to high compliance costs and limited regulatory understanding. Small and medium-sized enterprises (SMEs) still face barriers to EU market access.

The report calls for reforms in education and the judiciary to improve business confidence and better align skills with market needs. Addressing these structural challenges will be key to Georgia's long-term economic stability and EU integration efforts.