Georgia’s economy contracted by 6.2% in 2020
4Q20 real GDP growth was revised downward to -6.8% from the preliminary estimate of -6.5%. For the whole 2020 year, real GDP contracted by 6.2%. By sector, in 2020, real growth was posted in healthcare (+7.9% y/y), agriculture (+3.6% y/y), education (+3.1%), public administration (+1.8% y/y) and mining (+1.5% y/y). Meanwhile, contraction was recorded in hotels and restaurants (-37.9% y/y), transport and storage (-22.3% y/y), trade (-5.6% y/y), art, entertainment and recreation (-18.9% y/y) and in other sectors. In 2020, nominal GDP increased by 0.3% to GEL 49.4bn (US$ 15.9bn).
NPLs at 2.5% in February 2021
In February 2021, the banking sector loan portfolio increased by 8.3% y/y and 0.3% m/m, excluding FX effect. In unadjusted terms, loan portfolio was up 21.5% y/y (+0.7% m/m), amounting to GEL 38.4bn (US$ 11.6bn). By sector, corporate lending growth slowed to 6.8% y/y after growing 7.9% y/y in previous month, while retail loan growth was 9.8% y/y, unchanged from previous month (exc. FX effect). Notably, mortgages increased by 10.7% y/y (+10.8% y/y in previous month, exc. FX effects). In February 2021, loan dollarization stood at 55.2% (+0.94ppts y/y and -0.20ppts m/m) and NPLs stood at 2.5% (+0.34ppts y/y and flat m/m).
Bank deposits growth accelerated to 21.4% y/y (+2.9% m/m, exc. FX effect), amounting to GEL 36.0bn (US$ 10.8bn) in February 2021, after growing 20.7% y/y in previous month. By currency, GEL deposit growth slowed to 36.0% y/y in February after growing 38.4% y/y in previous month, while FX deposit growth accelerated to 12.3% y/y after increasing 10.5% y/y in January 2021 (exc. FX effect). In February 2021, deposit dollarization stood at 61.6% (-0.05ppts y/y and +0.19ppts m/m).
NBG sold US$ 40mn
On 22 March 2021, the NBG intervened on the FX market and sold US$ 40mn to limit GEL’s depreciation. This was 4th FX intervention YTD for a total sale of US$ 160mn through FX auctions.
