Weekly Market Watch
FDI increased by 61.1% y/y to all-time high US$ 2.0bn in 2022
FDI increased by 61.1% y/y to all-time high US$ 2.0bn or 8.1% of GDP in 2022, according to Geostat’s preliminary figures. Notably, reinvestments accounted for 64.5% of total FDI, while the equity component more than tripled to US$ 686.3mn. The financial sector was the largest FDI recipient at US$ 526.4mn (up 11.7% y/y, 26.3% of total), followed by real estate at US$ 406.9mn (up 9.6x y/y, 20.3% of total), water supply at US$ 197.0mn (up 526.7x y/y, 9.9% of total) and art, entertainment and recreation at US$ 173.1mn (down 25.4% y/y, 8.7% of total. UK topped the list of investors with US$ 428.3mn (21.4% of total FDI), followed by Spain (US$ 367.0mn, 18.3% of total), and USA (US$ 163.9mn, 8.2% of total).
Loan portfolio growth strengthened to 13.3% y/y in Jan-23
In Jan-23, the banking sector loan portfolio growth strengthened to 13.3% y/y excluding FX effect, after a 12.1% y/y growth in previous month. In unadjusted terms, loan portfolio increased by 5.5% y/y to GEL 44.5bn (US$ 16.8bn), after growing by 3.9% in December. By sector, both corporate and retail loans growth accelerated to 10.0% y/y (+8.6% y/y in previous month, exc. FX effect) and to 16.4% y/y (+15.4% y/y in previous month), respectively. The mortgages increased by 13.2% y/y in January (+12.2% y/y in December). In Jan-23, loan dollarization increased slightly to 44.7% (-5.25ppts y/y and +0.41ppts m/m) and NPLs stood at 1.8% (-0.13ppts y/y and +0.17ppts m/m).
Bank deposits growth remained robust increasing by 29.2% y/y (excluding FX effect) to GEL 43.6bn (US$ 16.5bn) in Jan-23, after a 29.6% y/y growth in previous month. By currency, GEL deposits increased by 29.3% y/y (+30.3% y/y in previous month) and FX deposits (exc. FX effect) by 29.1% y/y (same as in previous month). The deposit dollarization reduced further to 54.9% (-3.70ppts y/y and -1.22ppts m/m), the lowest level since March 1998.
International reserves stood at US$ 4.7bn in February 2023
Gross international reserves increased by 18.2% y/y to US$ 4.7bn in Feb-23, according to NBG. On a monthly basis, the reserves reduced by 3.7% (-US$ 179.1mn). Changes in reserves were attributed to the government and banking sector FX operations.