The banking system guarantees the economic strength of the country. Its sustainability is due to the sustainability of the credit portfolio. Therefore, scientific research on banking risks is always relevant. Basel recommendations and central bank regulations provide risk minimization in case of default of borrower by creating risk reserve, but the high range of macroeconomic factors creates a basis for creating credit risk. The model, which determines the risk factors, may be structurally the same, but the quality of the influence of factors is different in various countries. The influence of macroeconomic factors is particularly evident in developing countries. The impact of economic factors in different countries is high in GDP of these countries. The article focuses on determining the influence of macroeconomic factors on credit risk of systematic banks in Georgia. The coefficients of individual macroeconomic indicators are calculated by using Pearson’s correlation. The credit risk ratio is taken from the bank’s overdue credits and credit portfolio ratio. Based on the correlation coefficients obtained, the expected risk of shock changes is calculated.

Introduction. Despite macroeconomic improvements, Georgia has faced a persistent negative demographic dividend that has held back economic growth over the past two decades. This study combines dependency ratios, unemployment, self-employment, and informal employment characteristics using an innovative algorithm. Considering its unique informal sector, this approach provides a more realistic picture of Georgia’s demographic and economic dynamics. Aim and tasks. This study aims to empirically assess the impact of the demographic situation in Georgia on labour market dynamics and the socio-economic transition using a modified algorithm, regression analysis, and CGE modelling to identify necessary reforms and develop evidence-based policy recommendations to facilitate the realisation of the demographic dividend. Results. The study confirms that, despite GDP and wage growth, Georgia has experienced a persistently negative demographic dividend over the past two decades. Traditional dependency ratios fail to reflect the specifics of Georgia’s highly informal and underemployed labour market. Regression analysis and the Granger causality test show that dependent unemployment and cost increases are the key drivers behind the negative trend. Empirical data show a decline in net demographic returns: -€35.96 million (2002-2012) and -€89.91 million (2013-2023), indicating that employees are unable to pay dependent expenses, especially in 2022. Regression (R² = 96%) confirmed the negative impact of dependency burden and expenses, while the falling birth rate had only a weak offsetting effect. Granger tests revealed that the size of the dependent population, food expenditures and mortality rates predict future dividend values, confirming the relevance of the planning model. Evidence strongly suggests that without structural reforms in labour, social, and health policies and productivity boosts, Georgia’s demographic trends will continue to hinder economic growth rather than support it. Conclusions. The study concludes that without targeted reforms in the labour market, healthcare, and economic planning, Georgia will not be able to turn demographic changes into economic benefits. The presented model emphasises the influence of demographic factors on socio-economic development and the importance of aligning demographic trends with effective economic policies.

Sophio Beridze Email:sopho1982@hotmail.com PhD Students, Batumi Shota Rustaveli State University Batumi, Georgia https://orcid.org/0009-0002-7264-2873 Asie Tsintsadze Email:asie.tsintsadze@bsu.edu.ge Doctor of Economics, Professor, Batumi Shota Rustaveli State University Batumi, Georgia https://orcid.org/0000-0002-4493-8872 Lela Oniani Email:lela.oniani@bsu.edu.ge Associate Professor Batumi Shota Rustaveli State University Batumi, Georgia https://orcid.org/0000-0002-5960-4015 Coming out from tendency of increasing state debt annually, debt management issues is highly important for many countries of the world. In recent years state debt of Georgia and including foreign debt is at critical limit which makes negative impact on country’s debt rating. The questions arise in society: why does the state take debt? With what conditions? What is the benefits of society from debt? What are the consequences which state takes? Etc. The goal of this Article is to demonstrate tendency for management issues of debt service indicators and accompanying risks of state debt of Georgia and state foreign debt. The article shows the role of state debt as debt asset and importance in economic development of country as well as historical aspects of state debt policy. Methodology/Approach The structure and tendency are studied according to the last 20 years statistic data, inter –dependence quality of selected factors is evaluated. Practical value/Implications - Though necessity for increasing domestic and foreign debt is explained by the necessity of more investment for achieving country development and economic goals, we consider that correct policy of state foreign debt management and high reliability of society it is necessary to elaborate debt necessity research in the form of file, also it should be clear what are the criterion for conferring privilege to existing debtor among alternate debtors. The measures which will promote the process of transforming foreign state debt to GDP to minimal limit, should be planned and elaborated.

The development and harmonization of Higher Education system in Georgian remains a challenging process. Georgia became a part of the Bologna process in May 2005 and this significantly changed the country's higher education system, bringing it closer to European standards. Despite the positive changes, there is a number of reforms that have been under argument among researchers. The research analyses the Bologna process in general and its implication in the Georgian higher education system, rethinking the main goals and approaches of the Bologna process and evaluating its significance. The paper particularly addresses the quality assurance standards in general and its execution in Georgia, the internationalization of higher educational institutions of Georgia, and students’ mobilities inside and outside of the country within an Erasmus Mundus and Erasmus+ framework. The results of the study show that the Bologna process has positively impacted higher education system in Georgia, it has become more transparent and closer to international standards; however, there is still room for improvements, especially in the scope of internationalization and process of attracting international students.

This paper evaluates the effectiveness of Georgia’s non-state pension fund using monthly data for 2022–2023 and develops short-to-medium-term forecasts to 2030. We assemble indicators on pension contributions, investment returns, and the exchange rate, and define a fund-effectiveness measure to capture the system’s ability to meet obligations. Ordinary Least Squares (OLS) regression is used to estimate the relationship between effectiveness and its determinants; we verify time-series properties with Augmented Dickey–Fuller tests, assess Granger causality, and construct an ARIMA model to forecast dynamics under current policies. The results indicate a positive and statistically significant association between contribution inflows and effectiveness, while the link between investment returns and effectiveness is weak or negative during the sample period, consistent with portfolio transition, limited diversification, and market volatility. Exchange-rate movements appear positively associated with effectiveness, reflecting the valuation of foreign assets, but also imply additional risk to beneficiaries’ purchasing power. Forecasts suggest that, absent reforms, effectiveness is unlikely to rise materially by 2030. We discuss implications for policy design and governance. Priority actions include: strengthening risk management and diversification; aligning asset duration with liabilities; instituting foreign exchange risk hedging where appropriate; publishing clearer performance and risk disclosures; and enhancing default portfolio design and member choice architecture. The findings inform the calibration of contribution policy and investment guidelines for Georgia’s non-state pension system.

Effective functioning of a financial market has a key role in the development of a country's economy. Developing countries experience lack of funds, one of the best ways to attract investment capital is the development of the right direction of the securities market, credit market and insurance market that are served by the regulations adopted in this field, which are derived from the Association Agreement. It can be said that a new phase starts with new regulations on the market of financial institutions. Current regulations are directed to the solvency of the insurance company, the use of mechanisms for maintaining financial sustainability, and the rule of formation and placement of reserves. However, there are no regulations for the development of life insurance. According to the new regulations, we think that in 2019 banking sector will be significantly different from the 2017 situation. In the short term, it will bring down retail lending, increase expenditures in the sector, increase demand on capital and reduce profitability, and in the long term we should hope that it will contribute to the improvement of the financial system of Georgian financial system, which will ensure financial sustainability of the banking system. Regulations concerning the development of the securities market, here a pension reform is important, which has come into force since January, 2019. As a result of this, the state accumulative pension system started in which large amounts of accumulated funds will be invested in local securities, in the local economy. The research objective: To determine the effectiveness of new regulations on the financial market, the purpose of implementing regulations is to improve the quality of the banking system, the securities market, the insurance market, and the sustainable development of the economy.