Real GDP up 2.9% y/y in August 2016
Georgia’s economy expanded 2.9% y/y in August 2016, better than 2.1% y/y reported in previous month, according to GeoStat’s rapid estimates. As a result, output growth averaged 2.7% y/y in 8M16. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
NPLs at 4.0% y/y in August 2016
In August 2016, the banking sector loan portfolio increased 8.2% y/y, excluding the exchange rate effect (+7.0% y/y and -1.1% m/m in unadjusted terms), to GEL 16.4bn (US$ 7.1bn). Deposits increased 10.2% y/y, excluding the exchange rate effect (+8.7% y/y and -1.6% m/m in unadjusted terms), to GEL 14.6bn (US$ 6.3bn). NPLs stood at 4.0% in August 2016, up 0.7ppts y/y and up 0.1ppts m/m.
NBG sold US$ 40mn
Last week, NBG intervened on the FX market and sold US$ 40mn, aimed at curbing fluctuation of the national currency. Overall, NBG bought total of US$ 278mn and sold US$ 140mn at 20 interventions YTD. GEL weakened 0.1% w/w and strengthened 3.6% YTD against the US$.
Georgia improves ranking in Global Competitiveness Index
World Economic Forum global competitiveness report of 2016-2017, released on 28 September 2016, named Georgia the most improved Eurasian economy, up 7 places in the ranking at 59th out of 138 countries.
Current account deficit stood at 13.4% of GDP in 2Q16
Current account deficit narrowed to 13.4% of GDP in 2Q16 from 14.2% of GDP in 1Q16, increasing 32.6% y/y in nominal terms to US$ 486.9mn, according to NBG. Merchandize trade deficit, traditionally the major contributor to deficit creation, increased 119.5% y/y as exports (-16.8% y/y) were down and imports (+58.6% y/y) were up. However, excluding donated C-hepatitis medicine imports, goods imports were down 4.6% y/y in 2Q16. Positive balance in services and current transfers compensated 86.2% of trade deficit. Among services, tourism had the largest positive balance, increasing 12.0% y/y to US$ 515.3mn (14.1% of GDP). Net current transfers, the largest positive item of the current account, were up 273.1% y/y to US$ 1.5bn, on the back of 7.5x increase in the government sector transfers due to the international aid received for hepatitis-C elimination program. Net FDI, significant item for financing the current account deficit, amounted to US$ 380.6mn (10.5% of GDP, up 8.6% y/y). The largest investment inflows were directed to transport and communications sector.
