Weekly Market Watch

Real GDP growth was 13.0% y/y in Jul-24
Georgia’s economy gained momentum, with real GDP up by 13.0% in Jul-24, after growing by 7.5% in previous month. Cumulatively, real GDP growth came in at 9.7% in 7M24. In July, real growth was recorded in the construction, manufacturing, ICT, professional & scientific activities and trade sectors. Meanwhile, the energy sector contracted in July. Due to the stronger-than-expected growth in 7M24, we are raising our real GDP growth forecast to 8.0% from 7.0% for the full-2024 year (see latest macro forecasts here).

Bank lending increased by 18.3% y/y in Jul-24
In Jul-24, the banking sector loan portfolio increased by 18.3% y/y (+0.9% m/m), excluding FX effect, after a 17.8% y/y growth in previous month. In unadjusted terms, loan portfolio rose by 19.6% y/y (-0.4% m/m), reaching GEL 57.1bn (US$ 21.0bn), after growing 21.2% y/y in Jun-24. By sector, corporate loans grew by 20.5% y/y (excluding FX effect), while retail loans increased by 16.5% y/y. Loan dollarization reduced further to 44.2% (-1.29ppts y/y and -0.93ppts m/m) in Jul-24.
On the deposits side, there was a 15.0% y/y increase (excluding FX effect) to GEL 55.7bn (US$ 20.5bn) in Jul-24, following a 13.5% y/y growth in the previous month. In terms of currency breakdown, GEL deposits increased by 21.6% y/y and FX deposits (exc. FX effect) were up 8.7% y/y. Consequently, deposit dollarization also reduced further to 48.5% (-2.14ppts y/y and -0.56ppts m/m) in Jul-24.

NBG purchased US$ 1.9mn in Jul-24
In Jul-24, NBG purchased US$ 1.9mn through the BMatch platform amid strong FX inflows. Overall, the NBG was a net buyer of US$ 68.8mn in 7M24, having purchased US$ 288.5mn and sold US$ 219.8mn.