Weekly Market Watch

Fitch affirms Georgia's credit rating at BB with a Stable Outlook  
On 4 February 2022 Fitch Ratings affirmed Georgia’s sovereign credit rating at BB with a Stable Outlook. Based on Fitch, the rating is supported by a credible and effective policy framework and stronger governance indicators relative to 'BB' peers. In the assessment repot, Fitch underlined that Georgia’s growth was a robust in 2021, which has been driven by domestic demand, strong inflows of net remittances, a partial tourism recovery, and fiscal stimulus. Moreover, growth in exports of goods also performed strongly due to the recovery of key trading partners and higher commodity prices. According to Fitch, Georgia's economy is expected to grow by 5.5% and 5.3% in 2022 and 2023, respectively, above potential of 4.0%-4.5%. Fitch forecasts tourism revenues to recover to 80% of 2019 levels in 2022, after reaching 38.1% of 2019 levels in 2021.  Based on Fitch, risks surrounding the pandemic and low vaccination rate pose downside risks to GDP outlook.

International reserves at US$ 4.1bn in January 2022 
Gross international reserves decreased by 0.6% y/y to US$ 4.1bn in January 2022 according to NBG. On a monthly basis, the reserves were also down by 4.5% (-US$ 194.0mn). There were no FX auctions in January and changes in reserves were attributed to the government and banking sector FX operations, and/or asset revaluation.