FDI up 5.2% y/y in 2016
FDI in Georgia stood at US$ 1,645.4mn (+5.2% y/y) in 2016, according to GeoStat’s preliminary figures. The transport and communication sector was the largest FDI recipient at US$ 645.0mn (+10.3% y/y, 39.2% of total) in 2016, followed by the energy sector at US$ 202.8mn (+63.9% y/y, 12.3% of total), construction US$ 163.5mn (+47.7% y/y, 9.9% of total), and the financial sector at US$ 135.8mn (-23.9% y/y, 8.25% of total). Azerbaijan topped the list of investors with US$ 578.4mn, followed by Turkey at US$ 272.3mn, United Kingdom at US$ 120.8mn, and Netherlands at US$ 95.4mn.
NBG keeps its policy rate unchanged at 6.75%
At its meeting on 7 March 2017, NBG’s monetary policy committee decided to keep the policy rate unchanged at 6.75%. NBG still considers appropriate to increase the policy rate to 7.0% in 1H17, subject to more certainty on recent dynamics affecting prices. Annual inflation came in at 5.5% in February 2017 and central bank expects price level to remain above the target level of 4.0% in 2017. Consumer prices were mainly affected by the increases in world commodity prices, excise taxes and the lagged effect of currency depreciation. Meanwhile core inflation (non-food, non-energy) and prices on domestic goods and services remain at low levels. NBG expects inflation to decrease below its target in 2018, when one-off factors affecting price level dissipate. The next committee meeting is scheduled for 2 May 2017.
International reserves up 14.6% y/y in February 2017
Gross international reserves were up 14.6% y/y to US$ 2.8bn in February 2017, while reserves were almost flat on a monthly bases (-0.6% m/m), according to NBG. The increase in reserves was related to government FX operations and/or asset revaluation.
