NPLs at 3.8% y/y in September 2016
In September 2016, the banking sector loan portfolio increased 6.7% y/y after growing 8.2% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 5.2% y/y and 0.5% m/m to GEL 16.5bn (US$ 7.1bn). Deposits were up 9.7% y/y to GEL 14.9bn (US$ 6.4bn), excluding the exchange rate effect. In unadjusted terms deposits were up 7.8% y/y and up 2.4% m/m. As FX-denominated deposits drove growth, deposit dollarization increased slightly to 69.2% in September from 69.0% in previous month. NPLs stood at 3.8% in September 2016, up 0.9ppts y/y and down 0.2ppts m/m.
NBG keeps its policy rate unchanged at 6.5%
At its meeting on 26 October 2016, NBG’s monetary policy committee decided to keep the policy rate unchanged at 6.5%, despite the decline in annual inflation to 0.1% in September 2016, well below the NBG’s target of 5.0% for 2016. NBG cited that the monetary policy decision is based on the macroeconomic forecast, according to which weak aggregate demand and lower inflation expectations indicate the need to decrease the monetary policy rate to its neutral level of 6.0% in the medium term. However, the reductions in the policy rate implemented in the previous periods have not fully passed through the economy according to NBG, and it expects to reduce its policy rate within the next two quarters. The next committee meeting is scheduled for December 14, 2016.
Georgia named top improver globally for the 4th time in the past 12 years
According to the World Bank 2017 Doing Business report, Georgia has improved its position by 7 places and ranks 16th out of 190 countries. Georgia is one of the regional leaders by total count of reforms according to the latest report, implementing 5 reforms out of 10 directions as measured by Doing Business. Georgia is in the 3rd position globally in registering property, 7th in protecting minority investors, 22nd in paying taxes, 39th on ease of getting electricity, and 54th in trading across borders; its lowest ranking (106th) was recorded for resolving insolvency.
