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G&T Team
ResearchResearch Reports Weekly Market Watch

Weekly Market Watch

Real GDP growth was 7.2% in Jun-22
The economic growth in Georgia remains strong, while it softened to 7.2% y/y in Jun-22, after growing by 11.6% y/y in previous month, based on Geostat’s rapid estimates. Cumulatively, in 1H22, the real growth came in at 10.5% y/y. Considering strong 1H growth and ongoing data, we revise the 2022 baseline growth forecast up to 9.2% from 7.6%. In this forecast, we assume growth to moderate in 4Q22 reflecting global slowdown. However, if external inflows remain strong despite global slowdown in 2H, in optimistic scenario, we expect 2022 growth at 10.6%. Growth in June was recorded in hospitality, mining, transport and communication, while it reduced in manufacturing, construction and real estate sectors (see here).

Loan portfolio growth accelerated to 18.7% y/y in Jun-22 
In Jun-22, the banking sector loan portfolio accelerated to 18.7% y/y (+2.1% m/m), excluding FX effect, after a 18.1% y/y growth in previous month. In unadjusted terms, loan portfolio growth was 11.3% y/y (+1.2% m/m) to GEL 43.7bn (US$ 14.9bn), after growing by 9.1% in May. By sector, corporate loan growth (exc. FX effect) accelerated to 16.9% y/y (+15.7% y/y in previous month) and retail loans growth was unchanged at 20.4% y/y in June. The mortgages increased by 14.2% y/y in June after growing by 13.9% y/y in previous month. In Jun-22, loan dollarization reduced further to 48.3% (-4.06ppts y/y and -0.39ppts m/m) and NPLs stood at 1.9% (-0.36ppts y/y and -0.08ppts m/m). 
Bank deposits growth accelerated to 17.4% y/y (+3.8% m/m, exc. FX effect) to GEL 38.3bn (US$ 13.1 bn) in Jun-22, after a 13.1% y/y growth in previous month. By currency, in June, both GEL and FX (exc. FX effect) deposits growth accelerated to 16.6 % y/y (from 11.8% y/y growth in previous month), and 17.9% y/y (from 13.9% y/y growth in previous month), respectively. The deposit dollarization reduced to 57.9% (-2.08ppts y/y and -0.21ppts m/m).