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G&T Team
ResearchResearch Reports Weekly Market Watch

Weekly Market Watch

Real GDP growth was 8.8% y/y in Sep-22
The economic growth in Georgia eased to 8.8% y/y in Sep-22, after a 10.5% y/y growth in previous month, based on Geostat’s rapid estimates. Cumulatively, in 9M22, the real growth came in at 10.2% y/y. Growth in September was recorded in transport, IT services, construction, hospitality and industry sectors, while it reduced in real estate sector.
Considering strong ongoing data, we revised 2022 growth projection upwards to 10.2%, from our baseline projection of 9.2% (see more here).

Inflation retreated to 10.6% y/y in Oct-22 
Annual CPI inflation retreated to 10.6% in Oct-22 from a 11.5% inflation in previous month. Core inflation (non-food, non-energy, and non-tobacco) also retreated to 7.3% (-0.2ppts m/m) in October. By categories, annual inflation was mostly driven by price changes in food and non-alcoholic beverages (+15.8% y/y, 5.22ppts), transport (+11.6% y/y, 1.38ppts), housing, water, electricity, gas and other fuels (+13.5% y/y, 1.31ppts), and restaurants and hotels (+16.8% y/y, 0.71ppts) categories. On a monthly basis, there was a 0.5% inflation in Oct-22, driven by price changes in food and non-alcoholic beverages (+1.4% m/m) and transport (-2.0% m/m) categories.

Tourist arrivals recovery slowed in Oct-22
In Oct-22, international visitors to Georgia increased by 115.2% y/y to 442.6 thousand persons. This growth was mainly driven by increase in tourist arrivals (c.78% of total arrivals), as strong growth in same-day arrivals mostly reflect last year’s low base. Despite high growth, tourist arrivals recovery slowed in October, accounting for 78.5% pre-pandemic level in Oct-22, down from 83.8% recovery in previous month. Meanwhile, same-day arrivals recovery stood at 43.3% of Oct-19 level, after a 44.0% recovery in Sep-22. Russia was the top source country by international arrivals (24.7% of total), followed by Turkey (18.3% of total), and Armenia (16.5% of total). Most visitors traveled to Georgia via land (65.1% of total), followed by air (34.0% of total). 
Overall, in 10M22 total international arrivals stood at 3.8mn persons (up 171.3% y/y, c.57% of 2019 level), of which tourist arrivals reached 3.0mn persons (up 137.9% y/y, 68.8% of 10M19 level). We estimate tourism revenues at US$ 2.8bn in 10M22 (almost full recovery vs pre-pandemic level; revenues recover faster than arrivals mostly because of the influx of migrants from Russia, Belarus and Ukraine).