Trade deficit down 11.2% y/y (excluding one-offs) in 11M15
According to GeoStat’s preliminary figures, the trade deficit in November 2015 decreased 24.9% y/y to US$ 392mn, as exports fell 7.9% y/y to US$ 187mn, while imports were down 20.1% y/y to US$ 579mn. In 11M15, exports decreased 23.2% y/y to US$ 2.0bn, imports fell 15.2% y/y to US$ 6.6bn (excluding donated c-hepatitis medicine imports of US$ 318mn in 11M15), and the trade deficit decreased 11.2% y/y to US$ 4.5bn. Therefore, the adjustment in imports was instrumental in the elimination of external imbalances, easing pressure on GEL. Detailed statistics will be available on December 21, 2015.
Producer price index down 0.8% m/m and up 8.2% y/y in November 2015
PPI for industrial goods decreased 0.8% m/m in November 2015, according to GeoStat. A 0.6% decline in prices for manufacturing contributed the most (-0.5ppts) to the overall index change (lower prices recorded for manufacture of basic and fabricated metals and chemical products). Prices were also down for mining and quarrying (-5.0% m/m) and supply of electricity, gas, and water (-0.8% m/m).
Annual producer prices in Georgia increased 8.2% in November 2015, with manufacturing prices increasing 7.9% y/y (mostly for food, beverages and tobacco, chemical products, and paper and publishing), contributing +6.46ppts to the overall index change. Prices were also up 13.1% y/y in the electricity, gas, and water supply category, contributing +1.91ppts to the overall index change.
Money transfers down 18.3% y/y in November 2015 and down 26.2% y/y in 11M15
Money transfers decreased 18.3% y/y to US$ 85.2mn in November 2015, according to NBG. The 27.1% y/y decline from Russia (39.2% of total) and 41.6% y/y drop from Greece (10.2% of total) were the major contributors to the decline in total money transfers. As in previous months, remittances posted growth from USA +18.2% y/y (9.7% of total), Israel +50.5% y/y (3.7% of total), and Germany +9.7% y/y (2.7% of total), while transfers from Turkey decreased 14.0% y/y (5.8% of total). In 11M15, money transfers decreased 26.2% y/y to US$ 978.0mn.
NBG increased its policy rate by 50bps to 8.0%
At its meeting on December 16, 2015, NBG’s monetary policy committee increased the policy rate by 50bps to 8.0% – the 7th rate increase this year. According to NBG, the tightening of the monetary policy must have a positive effect on the decrease in inflation expectations and no further monetary tightening is anticipated for the coming period unless more shocks take place. NBG noted that the impact of the recent external shocks on the exchange rate has been exhausted and no additional pressure can be expected. According to the current forecast, inflation will remain above its target value of 5.0% in the beginning of 2016 and will start gradual decreasing towards its target value in 2H16. The next committee meeting is scheduled for February 3, 2016.
New link to Georgia extends Clearstream’s coverage to the Caucasus
Clearstream, a leading international central securities depository (ICSD), will expand its international coverage by opening a new domestic link to Georgia on January 11, 2016 – a major milestone for the local capital market development. The link will help foreign investors access the local market and will enable Clearstream to offer Georgian government bonds and supranational bonds via Bank of Georgia, which acts as local custodian and cash correspondent bank.
