Real GDP growth was 7.5% y/y in Jun-24
Georgia’s economy grew by 7.5% y/y in Jun-24, after growing by 9.2% y/y in previous month. Cumulatively, real GDP growth reached 9.0% y/y in 1H24. The financial & insurance, construction, ICT, transport, and professional & scientific activities were the primary drivers of growth in June. Meanwhile, only manufacturing sector contracted in the same period.
We maintain our real GDP growth forecast at 7.0% for 2024 (see latest macro forecasts here).
Annual inflation was 1.8% in Jul-24
In Jul-24, annual inflation retreated to 1.8%, down from the 2.2% in previous month. This slowdown was primarily driven by a deceleration in domestic inflation, which slowed to 1.9% in Jul-24 from 2.8% y/y in Jun-24. Meanwhile, imported inflation rose to 3.7% y/y in July, up from 3.3% y/y in June. Notably, core inflation, excluding volatile food, energy and tobacco prices, reduced further to 1.1% y/y in Jul-24 from 1.4% y/y recorded in previous month.
By categories, annual inflation in Jul-24 was mostly driven by price changes in transport (+9.4% y/y, +1.12ppts), food and non-alcoholic beverages (+1.4% y/y, +0.48ppts), alcoholic beverages & tobacco (+4.3% y/y, +0.29ppts), hotels & restaurants (+6.7% y/y, +0.22ppts), communication (-7.6% y/y, -0.29ppts) and utilities (-2.8% y/y, -0.22ppts) categories.
On a monthly basis, there was a 0.4% y/y deflation in Jul-24, mainly due to reduced prices in food & non-alcoholic beverages (-0.7% y/y, -0.24ppts) and communication (-6.6% y/y, -0.24ppts) categories.
NBG kept its key rate unchanged at 8.0%
On July 30, 2024, the NBG’s Monetary Policy Committee decided to keep its key rate unchanged at 8.0%, citing increased inflationary risks from volatile international oil and food prices as well as higher shipping costs from China. Based on NBG’s updated forecast, inflation is expected to gradually approach the 3.0% target level through 2024. The next committee meeting is scheduled for 11 September 2024.
Tourism revenues at US$ 1.9bn in 1H24
Tourism revenues increased by 5.2% y/y to a record high of US$ 1.9bn in 1H24, according to NBG.
We forecast tourism revenues to reach US$ 4.3bn for the full-2024 year, up from US$ 4.1bn in 2023.
