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Georgia's Tourism Sector - Tourism Market Watch | January 2017

9 Feb, 2017

The number of international arrivals was up 19.8% y/y to 0.39mn in January 2017. Out of the top four source markets, there was strong growth from Russia (+40.3% y/y), Armenia (+31.4% y/y), and Azerbaijan (+7.1% y/y), while the number of visitors from Turkey was flat (-0.8% y/y). 

While the top four source markets accounted for 86.3% of international arrivals in January 2017, secondary source markets also posted robust performances. Ukraine, the 5th largest source market, posted a 28.2% y/y increase in January 2017, while the number of Iranian visitors was up over 7x to 8,000 visitors, albeit from the low base in January 2016, as visa-free regime with Iran was reinstated in February 2016. After growing 8.6% y/y in 2016, arrivals from the EU posted 26.1% y/y growth to over 10,500 visitors in January 2017, with Poland (+24.9% y/y), Germany (+32.0% y/y) and United Kingdom (+22.8% y/y) the top contributors to growth. 

The tourist category continues to drive arrival growth in January 2017, after posting a 19.0% y/y growth rate in 2016. The number of overnight visitors (‘tourist’ category) was up 32.4% y/y and accounted for 39.8% of total international arrivals in January 2017. Same-day arrivals posted modest growth of 5.9% y/y, while the number of transit visitors was up 34.8% y/y in January 2017, after declining 5.7% y/y in 2016.

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Georgia's Energy Sector - Electricity Market Watch | December 2017

8 Feb, 2017

Domestic consumption increased 6.2% y/y in 2016. The main contributor was Telasi (+15.3% annually), which doubled its 2015 annual growth rate (+7.5% y/y). The Abkhazian region, which led the growth in 2015, continued steady growth (+7.0% y/y) in 2016. Energo-Pro subscribers increased their consumption by 3.3% y/y in 2016, slightly lower than the growth in 2015 (+4.3% y/y). Consumption by Kakheti Energy Distribution subscribers increased by only 1.9% in 2016, following much larger increases in previous years (8.4% in 2015 and 8.1% in 2014). Consumption of eligible consumers decreased 1.0% y/y from the low base in 2015 (-21.4% y/y), but the decrease was the result of Rustavi Water Company giving up its eligible consumer status in 2016 (it accounted for 3.4% of direct consumption in 2015). Consumption of Georgian Manganese, the largest direct consumer, was up 4.4% y/y from the 2015 low base (-20.3% y/y).  

The increased level of consumption was satisfied almost entirely by domestic generation sources. Domestic generation increased 6.8% y/y and comprised 96.0% of total electricity supply. HPP generation increased 10.4% y/y, while TPP generation decreased 6.0% y/y in 2016. Growth of hydro generation was mainly driven by regulated HPPs, with generation up 7.8% y/y by Enguri and Vardnili and 11.9% y/y by other regulated HPPs. Generation by deregulated HPPs was up by 16.6% y/y. 91.3% of total electricity supply was consumed by domestic consumers, 4.6% was exported, and 4.1% was consumed by power plants or lost during transmission.

Georgia became a net exporter of electricity in 2016 with 80.1gWh of net export. Electricity import decreased dramatically (-31.5% y/y) to 478.9gWh in 2016 and accounted for only 4.0% of total electricity supply. 77.1% of imported electricity came from Azerbaijan, the rest from Russia. Exports in 2016 were down 15.3% y/y to 559.0gWh. Exports to the main export market, Turkey (52.7% of 2016 export), decreased 29.8% y/y, largely due to the fewer export months for Paravani HPP, per the amended MoU with Georgian Urban Energy. There was a significant increase in export to Armenia (+57.4% y/y), while export to Russia declined 13.0% y/y and accounted for 26.4% of exported electricity.  Total amount of electricity transit from Azerbaijan to Turkey reached 849.6 gWh in 2016.

Wholesale market prices in Georgia decreased 23.3% y/y to USc 4.2/kWh, 35.2% below the Turkish market clearing price in December 2016. Turkish electricity prices increased 12.6% y/y to USc 6.5/kWh from a significantly low base in December 2015 (-24.5% y/y). 22% of total electricity supplied to the grid in December 2016 was traded through the market operator, with the rest traded through bilateral contracts.

HPPs commissioned in late 2016 (164.9MW) are expected to account for 5.7% of total hydro generation in 2017. Generation of deregulated HPPs already posted a significant increase in Dec-16 (+27.5% y/y). An estimated US$ 733mn will be spent on the construction of the Namakhvani HPP cascade in the next 5 years.  Number of Solar and wind projects are increasing.

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Regional Fixed Income Market Watch | January 2017

8 Feb, 2017


  • In 4Q16, GDP growth in the USA came in at 1.9% q/q (annualized), below expectations, while Euro Zone growth was above market expectations at 1.8% y/y (annualized).
  • In January 2017, inflation in the Euro Zone came in at 1.8% y/y, above market expectations.
  • According to short-term indicators, growth accelerated in Kazakhstan (+5.0% y/y), but slowed in Georgia (+0.3% y/y) in December 2016. Following positive growth in November 2016, growth in Armenia returned to negative territory (-0.1% y/y) in December 2016.
  • Negative growth persisted in Azerbaijan (-3.8% y/y) and Belarus (-2.6% y/y) in FY16.
  • Compared to the previous month, inflation retreated in December 2016 in Azerbaijan (+15.5% y/y), Belarus (+10.6% y/y), Kazakhstan (+8.5% y/y), and Russia (+5.4% y/y). Prices were up 8.5% y/y in Turkey and 12.4% y/y in Ukraine. Inflation in Georgia was at 1.8% y/y, while in Armenia it retreated further into negative territory (-1.1% y/y).
  • Monetary policy rate was raised in Georgia (to 6.75%, up 0.25ppts) and lowered in Belarus (to 17.0%, down 1.0ppts).


Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.

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Regional Fixed Income Market Watch | December 2016

10 Jan, 2017


  • US Federal Open Market Committee increased federal funds rate by 25 basis points to a range of 0.50-0.75% at its December meeting, the first increase since December 2015. Additionally, the expectation for the number of quarter-point rate hikes in 2017 was increased from two to three.
  • 3Q16 GDP growth in the USA was revised up from an annualized 3.2% to an annualized 3.5%, beating expectations.
  • European Central Bank kept its benchmark interest rate at 0.0% and announced a cut in asset purchases from EUR 80bn to EUR 60bn per month, starting April 2017.
  • According to short-term indicators, growth in November 2016 accelerated in Kazakhstan (+2.7% y/y) and Georgia (+2.0% y/y), but decelerated to 3.2% y/y in Ukraine. Following four months of contraction, growth in Armenia came in at 2.3% y/y in November 2016.
  • Negative growth persisted in Azerbaijan (-3.9% y/y) and Belarus (-2.7% y/y) in 11M16.
  • Inflation in November 2016 accelerated further in Azerbaijan (+17.1% y/y) and Belarus (+11.4% y/y) and retreated in Kazakhstan (+8.7% y/y), Russia (+5.8% y/y), and Ukraine (+12.1% y/y). Inflation in Georgia returned to positive territory (+0.2% y/y), while deflation slowed in Armenia (-0.6% y/y).
  • Armenian Central Bank cut its refinancing rate further to 6.25%, down 25 basis points, on December 27, 2016.


Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.

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