Real GDP growth accelerated to 9.3% y/y in Nov-22
The economic growth in Georgia accelerated to 9.3% y/y in Nov-22, after a 8.3% y/y growth in previous month, based on Geostat’s rapid estimates. Cumulatively, real growth stood at 10.0% y/y in 11M22. In November, the growth was recorded in construction, transport, financial intermediation, mining, trade and hospitality sectors, while manufacturing and real estate operations contracted. We forecast Georgia’s economy to grow by 10.2% in 2022 and 4.8% in 2023.
CA turned into surplus in 3Q22
Current account (CA) turned into surplus at 5.9% of GDP in 3Q22, according to NBG, this is for the 2nd time on record after a 0.3% of GDP surplus in 3Q18. The positive CA balance was mainly driven by a strong growth in service balance (+3.0x y/y, 17.4% of GDP, supported by a strong recovery in tourism revenues at 122.3% of 3Q19 level), followed by transfers (+54.3% y/y, 13.1% of GDP). Meanwhile, the merchandize trade deficit, traditionally the major contributor to deficit creation, increased by 15.7% y/y to US$ 1.2bn, as exports were up 50.8% y/y and imports increased by 36.3% y/y. Notably, net FDI increased by 2.4x y/y to US$ 687.2 (10.1% of GDP), while there was a negative balance in portfolio investment at US$ 1.0bn in 3Q22. Overall in 9M22, CA deficit was at a record low level of 2.7% of GDP, down from 10.2% in 9M21.
Loan portfolio grew by 13.8% y/y in Nov-22
In Nov-22, the banking sector loan portfolio growth was 13.8% y/y (+1.2% m/m), excluding FX effect, unchanged from the previous month. In unadjusted terms, loan portfolio increased by 5.4% y/y (+1.0% m/m) to GEL 43.7bn (US$ 16.1bn), after growing by 3.7% in October. By sector, corporate loans growth accelerated, up by 10.1% y/y (+9.4% y/y in previous month, exc. FX effect) and retail loans growth stood at 17.3% y/y (+17.9% y/y in previous month). The mortgages increased by 13.6% y/y in November after growing by 13.8% y/y in previous month. In Nov-22, loan dollarization slightly increased to 44.7% (-5.65ppts y/y and +0.05ppts m/m) and NPLs stood at 1.9% (-0.32ppts y/y and +0.03ppts m/m).
Deposits acceleration continued, up by 29.8% y/y (+1.6% m/m, exc. FX effect) to GEL 42.6bn (US$ 15.7bn) in Nov-22, after a 28.0% y/y growth in previous month. By currency, both GEL and FX deposits growth accelerated, with GEL deposits up 30.6% y/y (+26.8% y/y in previous month) and FX deposits (exc. FX effect) up 29.2% y/y (+28.7% y/y in previous month). The deposit dollarization reduced to 56.7% (-3.77ppts y/y and -0.57ppts m/m).
