The National Bank of Georgia released a new set of macroeconomic scenarios intended to help financial institutions apply International Financial Reporting Standard 9 (IFRS 9) in a transparent, consistent and efficient way. The update is positioned as timely forward-looking macroeconomic information for use in financial reporting amid uncertainty linked to regional and international geopolitical developments. The scenarios are driven primarily by assumptions about the duration of the ongoing conflict in the Middle East and the severity of global tariff policies. In the baseline scenario, domestic demand is the main driver of growth in the short term, with external demand expected to normalize in the medium term as the initial impact of tariffs diminishes; the upside scenario assumes more sustainable activity supported by expanded transit potential and quicker resolution of global trade flow disruptions; and the adverse scenario reflects risks of tighter trade and financial conditions from escalation in tariff policy alongside the Middle East conflict. The National Bank of Georgia stresses that the risk scenarios are not its forecast and that their use is intended to promote comparability of macroeconomic assumptions across institutions when assessing expected credit losses under IFRS 9.
National Bank of Georgia 2025-06-25
National Bank of Georgia publishes updated IFRS 9 macroeconomic scenarios to support consistent financial reporting and credit loss assessment
The National Bank of Georgia has issued new macroeconomic scenarios to help financial institutions apply International Financial Reporting Standard 9 (IFRS 9) transparently and consistently. These scenarios consider the ongoing Middle East conflict and global tariff policies, with varying assumptions for domestic and external demand. The bank emphasizes these scenarios are not forecasts but aim to enhance comparability of macroeconomic assumptions in assessing expected credit losses.