Weekly Market Watch

Real GDP growth was 7.5% y/y in Nov-24
Georgia’s economic growth slowed to 7.5% in Nov-24, after growing by 11.0% in previous month. Cumulatively, real GDP growth came in at 9.4% in 11M24. In November, real growth was recorded in the professional & scientific, ICT and transport sectors, while the manufacturing sector contracted. Due to November's growth being lower than anticipated, we expect real GDP growth of 9.4% for the full year-2024, down from our earlier projection of 9.7% (see latest macro review here).

Annual inflation was 1.9% in Dec-24 
In Dec-24, annual inflation was 1.9%, up from 1.3% posted in November. This increase was mainly driven by an acceleration in mixed goods inflation to 3.9% y/y (+3.1% y/y in Nov-24), along with, inflation for domestically produced goods and services standing at 2.2% y/y (+1.8% y/y in Nov-24). Meanwhile, imported inflation declined by -0.9% y/y (-1.7% y/y in the previous month). Notably, core inflation, excluding volatile food, energy and tobacco prices, rose further to 2.3% y/y in Dec-24 from 1.6% y/y in November.
By categories, annual inflation in Dec-24 was largely driven by price changes in food and non-alcoholic beverages (+3.6% y/y, +1.18ppts), alcoholic beverages & tobacco (+5.9% y/y, +0.40ppts), healthcare (+3.7% y/y, +0.35ppts), hotels & restaurants (+7.7% y/y, +0.27ppts), education (+5.1% y/y, +0.26ppts), transport (-1.4% y/y, -0.18ppts), utilities (-3.2% y/y, -0.27ppts) and communication (-12.7% y/y, -0.47ppts) categories. 
On a monthly basis, there was a 0.7% y/y inflation in Dec-24, mainly due to rising prices in food and non-alcoholic beverages (+1.3% m/m, +0.46ppts) category.
Notably, average annual inflation came in at 1.1% in 2024, down from 2.5% in 2023.

CA surplus at 0.7% of GDP in 3Q24
Current account (CA) recorded a surplus of US$ 61.4mn, or 0.7% of GDP in 3Q24, according to NBG. The annual improvement in the 3Q24 CA balance was mainly driven by a 14.2% y/y growth in service balance, along with a 6.9% y/y reduction in goods trade deficit. 
Overall, CA deficit reduced by 19.1% y/y to US$ 866.1mn, or 3.5% of GDP in 9M24, down from 4.8% of GDP in 9M23. Moreover, when excluding reinvestments (recorded in both CA and its funding categories), the CA balance showed a surplus of 0.1% of GDP in 9M24, compared to 0.5% of GDP in 9M23.
We forecast CA deficit at 4.9% of GDP in 2024, down from 5.6% in 2023.