Weekly Market Watch
Georgia’s economy grew by 9.5% in 2024
Georgia’s economic growth was 6.7% y/y in Dec-24, following a 7.5% y/y growth in previous month. This growth was mainly driven by increased activity in the financial & insurance, professional & scientific, transport, trade and ICT sectors, while the manufacturing sector contracted.
Overall, Georgian economy grew by 9.5% in 2024, after a 7.8% posted in 2023. Nominal GDP increased by 13.5% to GEL 91.8bn (US$ 33.7bn) and GDP per capita reached US$ 9,124 in 2024.
For 2025, under our baseline scenario, we forecast Georgia’s real GDP growth of 5.0% (see 2025 baseline and other macro scenarios in detail here).
Bank lending increased by 17.0% y/y in Dec-24
In Dec-24, the banking sector loan portfolio increased by 17.0% y/y (+2.4% m/m), excluding FX effect, after a 17.8% y/y growth in previous month. In unadjusted terms, loan portfolio rose by 18.2% y/y (+2.7% m/m), reaching GEL 62.2bn (US$ 22.2bn), after growing 18.4% y/y in Nov-24. By sector, corporate loans grew by 17.8% y/y (excluding FX effect), while retail loans increased by 16.3% y/y. Loan dollarization rose to 43.3% (-1.92ppts y/y and +0.53ppts m/m) in Dec-24.
On the deposits side, there was a 13.4% y/y increase (excluding FX effect) to GEL 58.3bn (US$ 20.8bn) in Dec-24, after a 14.0% y/y growth in previous month. In terms of currency breakdown, GEL deposits growth slowed further to 10.5% y/y (+12.8% y/y in Nov-24), while FX deposits (exc. FX effect) increased by 16.3% y/y (+15.2% y/y in Nov-24). Consequently, deposit dollarization increased further to 52.8% (+2.04ppts y/y and +1.08ppts m/m) in Dec-24.
NBG kept its key rate unchanged at 8.0%
On January 29, 2025, the Monetary Policy Committee of the NBG decided to maintain its key interest rate at 8.0%. While 2024 saw robust economic growth and inflation below the 3.0% target, the NBG cited considerable uncertainty as the primary factor in maintaining the rate. This uncertainty stems from both domestic economic factors and ongoing geopolitical instability. The regulator is cautious about future rate adjustments, aiming for a gradual normalization toward a neutral rate of 7.0%, depending on upcoming economic data and risk assessments. The next committee meeting is scheduled for March 12, 2025.
NBG purchased US$ 28.6mn in Dec-24
In Dec-24, the NBG purchased US$ 28.6mn on the FX market. Overall, the NBG was a net seller of US$ 434.8mn in 2024.