Real GDP growth was 5.7% y/y in October 2019
Georgia’s economy grew by 5.7% y/y in October 2019 after growing 5.2% y/y in previous month, according to Geostat’s rapid estimates. In October 2019, real growth was recorded in manufacturing, construction, hotels & restaurants, and information & communication sectors.  Meanwhile, real growth was down in mining and in arts, entertainment and recreation activities. Overall, real GDP growth was 5.1% y/y in 10M19. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics. 

NPLs at 2.7% in October 2019 
In October 2019, the banking sector loan portfolio increased 14.0% y/y, after growing 14.6% in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 19.4% y/y and up 2.1% m/m to GEL 30.8bn (US$ 10.4bn). Deposits were up 11.4% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 18.1% y/y and up 2.7% m/m to GEL 26.3bn (US$ 8.9bn). Loan dollarization stood at 55.3% (-1.09ppts y/y and +0.32ppts m/m) and deposit dollarization reached 63.9% (+0.51ppts y/y and +0.03ppts m/m). NPLs was 2.7% in October 2019 (-0.15ppts y/y and +0.02ppts m/m).

NBG sold US$ 20.0mn
On 26 November 2019, the NBG intervened on the FX market and sold US$ 20.0mn. YTD, the NBG is a net buyer of US$ 123mn as it purchased US$ 216mn in 1H19 and sold US$ 92.8mn during August-November 2019. 

Government targets a 2.5% deficit in the 2020 final budget
The government has submitted to the parliament the final draft of 2020 budget, which sets economic growth at 4.5% (revised down from 5.0% in initial draft) and GDP deflator at 3.5% (revised up from 3.0% in initial draft) for 2020. Fiscal deficit is set at 2.5% of GDP, total expenditures at 28.4% of GDP, and taxes at 23.2% of GDP on the consolidated budget level.  Total public debt to GDP is set at 42.5% (2019E 40.9%), reflecting reduced share of external debt (2020F 32.2% vs. 2019E 32.5%) and increased share of domestic debt (2020F 10.3% vs. 2019E 8.4%). Importantly, all ratios to GDP are reduced due to GDP recalculation (see our note of 18 November 2019). Notably, in nominal terms tax revenues and expenditures were revised upwards significantly compared to initial draft, while fiscal deficit was revised up slightly. Moreover, government targets growth in deposits by GEL 700mn up from GEL 400mn in initial draft.