From failing harvests to rising bills: Rising heat threatens Georgia’s farms, energy and economy

Rising temperatures are threatening Georgia’s farms, energy supply and banking sector, with experts warning that the country has a narrow window to prepare before the economic costs grow significantly.

For years, heatwaves in Georgia have been treated as a seasonal nuisance. That is changing. National and international research shows that sustained heat is beginning to affect the country's agriculture, energy system, infrastructure and even its financial sector.

The risk is no longer solely environmental. It is economic, and it is building quietly in the background of everyday life.

A measurable warming trend

According to Georgia's Fifth National Climate Report, average annual temperatures across most of the country rose by 0.25°C to 0.58°C when comparing the 30-year average for 1986-2015 with the preceding 30-year period.

This is standard practice in climate science, as long-term averages give a clearer picture than short-term swings, though it also means that this is the most recent official comparison available.

If global emissions are not significantly reduced, the report warns that Georgia's average temperature could climb by as much as 3.7°C by the end of the century. Small shifts like these translate into more frequent heatwaves, longer dry spells and greater strain on water resources.

Agriculture on the front line

The World Bank estimates that, without adaptation, rising temperatures and reduced rainfall in eastern Georgia could cut grain production by roughly 30 to 60 per cent in a long-term worst-case scenario.

This matters for the wider economy too: agriculture, forestry and fisheries added 5.42 billion Georgian lari ($[USD equivalent]) in value in 2025, around 5.9 per cent of Georgia's GDP.

That same year, wheat production fell by 3.6 per cent, maize by 5.3 per cent and potatoes by 6.1 per cent.

Farming decisions and prices also play a part, but heat and water scarcity are officially recognised as long-term threats to the sector.

The hidden cost to banks and households

When crops fail or yields fall, farmers earn less and food prices rise. That strain reaches the banking sector too.

The National Bank of Georgia's climate stress test shows that a severe heatwave scenario could reduce economic growth by around 0.44 percentage points, while making it harder for households and businesses to repay loans.

In that scenario, the banking sector's capital ratios would fall by roughly one percentage point, though existing buffers currently keep the sector resilient. Climate risk is now treated as a financial risk, not simply an environmental one.

Energy, infrastructure and workers

Hotter summers raise demand for cooling and electricity, while drought reduces hydropower output, a combination that can push costs on to consumers.

High temperatures also damage roads and power grids, and prolonged warm periods are linked to more complex hazards such as glacial melt and landslides, though experts caution that no single event can be blamed on climate change alone.

Outdoor workers in construction and agriculture are especially exposed, facing lower productivity and greater health risks as temperatures rise.

What is being done

Georgia is not starting from zero. A $74 million programme funded by the Georgian government, the Green Climate Fund, Switzerland and Sweden is strengthening weather monitoring, building early warning systems and supporting vulnerable communities.

Experts also point to further priorities: modernising irrigation, introducing drought-resistant crops, expandingagricultural insurance, establishing heat safety rules for workers and developing more energy-efficient buildings.

The choice facing Georgia

The main risk is not a single extreme heatwave, but heat becoming a regular part of life. If adaptation does not keep pace, the effects will show up gradually in crop yields, food prices, electricity bills and public health.

That is why experts argue that climate policy can no longer sit apart from economic and energy planning. Preparing now will almost always cost less than repairing the damage later.

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News Georgia Heatwaves Sustainable Energy Solutions Food prices farming energy supply South Caucasus