Inflation at 4.9% y/y and -0.6% m/m in December 2015
Annual CPI inflation rate slowed to 4.9% in December 2015 (within NBG’s target of 5.0%), compared to 6.3% in the previous month, according to GeoStat. Overall price changes were driven by price increases in food and non-alcoholic beverages (+3.8% y/y, +1.16ppts), health (+10.5% y/y, +0.98ppts), and housing, water, electricity, gas and other fuels (+8.3% y/y, +0.70ppts). Meanwhile, prices in the transport category decreased (-4.2% y/y, -0.48ppts) due to lower prices on fuel.
On a monthly basis, there was 0.6% deflation in December 2015. Price decreases in transport (-3.6% m/m, -0.40ppts), alcoholic beverages and tobacco (-1.0% m/m, -0.05ppts), and furnishings and household equipment (-0.8% m/m, -0.05ppts) were the major drivers of the monthly price dynamics.
International arrivals up 7.0% y/y in December 2015 and up 6.9% y/y in 2015
Tourist arrivals posted another significant growth of 7.0% y/y to 0.47mn persons in December 2015, according to the Ministry of Internal Affairs. Overall in 2015, total arrivals increased 6.9% y/y to 5.9mn persons. Increased arrivals from Armenia (+10.7% y/y, 24.9% of total), Russia (+14.0% y/y, 15.7% of total), and Azerbaijan (+8.6% y/y, 23.6% of total) contributed the most to the growth and were more than sufficient to compensate for the 3.6% y/y decline in arrivals from Turkey (23.6% of total). Arrivals from the EU increased 4.1% y/y (4.1% of total) in 2015.
Gross international reserves stood at US$ 2.5bn as of Dec-2015
Gross international reserves increased 1.7% m/m (+US$ 41.2mn) to US$ 2.5bn as of end-December 2015, according to NBG. On an annual basis, gross reserves fell just 6.6% (-US$ 178.6mn) and the current level is sufficient to finance 3.5 months of goods and services imports. Net foreign assets of NBG reached US$ 2.3bn (+1.7% m/m and -6.0% y/y). The growth in reserves was attributed to government FX operations, fully compensating NBG’s US$ 20mn FX intervention in December. Overall, NBG spent US$ 287mn (11.4% of its reserves) in 2015 on 9 interventions to support the GEL.
