Inflation was 4.3% y/y in June 2019
Annual CPI inflation was 4.3% in June 2019 down from 4.7% in May 2019, according to Geostat. Core inflation (non-food, non-energy, non-tobacco) was 1.4% in June 2019 up from 1.1% in previous month. Annual price changes were driven by price increases in food and non-alcoholic beverages (+6.5% y/y, +1.94ppts), alcoholic beverages and tobacco (+20.1% y/y, +1.33ppts) and transport (+3.2% y/y, +0.40ppts) categories. On a monthly basis, there was 1.0% deflation in June 2019, affected mostly by price decrease in food and non-alcoholic beverages (-3.9% m/m, -1.23ppts).
Tourist arrivals up 18.0% y/y in June 2019
Total international arrivals (tourists and same-day arrivals) to Georgia increased by 19.9% y/y to 0.73mn in June 2019, according to the Ministry of Internal Affairs. This growth was mostly driven by tourists arrivals (+18.0% y/y to 0.47mn trips, 64.9% of total), while same-day arrivals also increased by 23.6% y/y. Out of top countries, in June 2019, international visitors increased from Russia (+30.8% y/y), Turkey (+45.8% y/y), Azerbaijan (+8.8%), Armenia (+9.7% y/y), Israel (+4.2% y/y) and Ukraine (+24.8%). Visitors continued to decline from Iran (-54.1% y/y). Visitors from the EU were up 29.3% y/y to over 51,500 visitors, with Germany, Poland and UK driving growth. In 1H19, total international visitors stood at 3.2mn (+7.7% y/y), of which tourist arrivals reached 2.1mn (+10.0% y/y). Meanwhile, tourism revenues stood at US$ 1.5bn (+11.4% y/y) in 1H19 by our estimates.
International reserves up 24.3% y/y in June 2019
Gross international reserves were up 24.3% y/y to US$ 3.7bn in June 2019. On a monthly basis reserves were up 0.5% m/m, according to NBG. Change in reserves was attributed to NBG’s FX purchases in the amount of US$ 30mn, government and banking sector FX operations and/or asset revaluation.
