Real GDP growth was 3.7% y/y in November 2017
Georgia’s economy expanded 3.7% y/y in November 2017, according to GeoStat’s rapid estimates. Overall, in 11M17 real GDP growth was 4.8% y/y (growth was 2.4% y/y in 11M16). In November 2017, the growth was recorded in hotels and restaurants, real estate operations, trade and transport sectors, while growth was down in construction and manufacture of food products and basic metals. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
Current account deficit stood at 2.9% of GDP in 3Q17
Current account deficit narrowed to 2.9% of GDP in 3Q17 from 8.6% of GDP in 3Q16, decreasing 63.6% y/y in nominal terms to US$ 120.4mn, according to NBG. Merchandize trade deficit, traditionally the major contributor to deficit creation, decreased 1.4% y/y to US$ 984.2mn, as exports increased 19.4% y/y, while imports were up 7.7% y/y. Positive balance in services was up 27.7% y/y to US$ 857.9mn. Among services, tourism had the largest positive balance, increasing 31.0% y/y to US$ 929.0mn (22.6% of GDP). Net current transfers, the second largest positive item of the current account, were up 9.2% y/y to US$ 281.0mn. Net FDI, significant item for financing the current account deficit, amounted to US$ 525.6mn (12.8% of GDP, up 75.4% y/y).
Inflation was 6.7% y/y and 0.8% m/m in December 2017
The annual CPI inflation was 6.7% in December 2017 down from 6.9% inflation in previous month, according to GeoStat. Core inflation was 4.7% in December compared to 5.1% in previous month. Annual price changes were driven by price increases in food and non-alcoholic beverages (+7.3% y/y, +2.2ppts), transport (+14.9% y/y, +1.94ppts), and alcoholic beverages and tobacco (+17.5% y/y, +1.12ppts) categories. On a monthly basis, there was 0.8% inflation in December 2017. Price increases in food and non-alcoholic beverages (+1.4% m/m, +0.42ppts) and transport (+1.5% m/m, +0.2ppts) categories were the major drivers of monthly Inflation dynamics.
NPLs at 3.4% in November 2017
In November 2017, the banking sector loan portfolio increased 16.2% y/y after growing 16.6% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 24.1% y/y and 5.0% m/m to GEL 22.1bn (US$ 8.1bn). Deposits were up 17.6% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 23.4% y/y and up 4.9% m/m to GEL 19.9bn (US$ 7.3bn). Deposit dollarization reached 67.5% (-3.7ppts y/y and +1.1ppts m/m). NPLs stood at 3.4% in November 2017 (-0.5ppts y/y and +0.1ppts m/m).
Tourist arrivals up 31.7% y/y in December 2017
Total international arrivals to Georgia increased 23.3% y/y to 0.6mn visitors in December 2017, according to the Ministry of Internal Affairs. A 31.7% y/y growth in tourist arrivals (0.23mn persons, 39.2% of total) drove arrival growth. Out of top countries by arrivals, in December 2017, visitors continued to increase from Armenia (+13.7% y/y), Russia (+45.4% y/y), Azerbaijan (+15.7% y/y), Turkey (+33.4% y/y) and Iran (+74.1% y/y). Arrivals from EU were up 9.6% y/y to over 14,700 visitors. In 2017 international arrivals increased 18.8% y/y to 7.6mn visitors, while tourist arrivals increased 27.9% y/y to 3.5mn.
International reserves up 10.3% y/y in December 2017
Gross international reserves were up 10.3% y/y to US$ 3.0bn in December 2017, while reserves were up 1.3% m/m, according to NBG. There were no FX interventions by central bank in December. Change in reserves was attributed to government FX operations and/or asset revaluation.
