S&P upgraded Georgia’s sovereign credit rating
S&P upgraded Georgia’s sovereign credit rating by one notch to BB in October 2019, leaving the country just two notches from investment-grade status. Moody’s upgraded Georgia’s credit rating to this level in 2017, followed by Fitch in February 2019.
The S&P rating upgrade reflects Georgia’s comparatively high growth in recent years, even in a challenging external environment. S&P expects the Georgian economy to grow faster than other countries in the region in the coming years, at an average 4% in 2020-22. The ratings are constrained by low GDP per capita, as well as by balance-of-payments vulnerabilities, including Georgia’s import dependence and sizable external liabilities based on S&P.
Trade deficit up 6.6% y/y in September 2019
In September 2019, exports were up 0.5% y/y to US$ 302.6mn, imports increased by 4.0% y/y to US$ 748.6mn and the trade deficit increased 6.6% y/y to US$ 446.0mn, according to Geostat’s preliminary figures. In 9M19, trade deficit was down 11.6% to US$ 3.8bn as exports increased by 11.1% y/y to US$ 2.7bn and imports were down 3.3% y/y to US$ 6.5bn.
Money transfers up 13.9% y/y in September 2019
In September 2019, money transfers increased by 13.9% y/y to US$ 149.8mn, after growing 7.8% y/y in previous month, according to NBG. From major remitting countries, money transfers were up from Italy (+27.2% y/y, 14.1% of total), Greece (+12.3% y/y, 10.6% of total), USA (+8.4% y/y, 10.3% of total), Israel (+8.4% y/y, 9.0% of total) and Turkey (+13.2% y/y, 5.5% of total). Meanwhile, remittances continued to decrease from Russia (-3.7% y/y, 24.2% of total). Overall, in 9M19 money transfers were up 8.5% y/y to US$ 1.3bn.
International arrivals up 2.7% y/y in September 2019
Total international arrivals (tourists and same-day arrivals) to Georgia increased by 2.7% y/y to 0.78mn persons in September 2019, according to GNTA. This growth was mostly driven by same-day arrivals (+7.7% y/y to 0.24mn trips), while tourist arrivals increased slightly by 0.6% y/y (68.8% of total). Out of top countries, in September 2019, international visitors increased from Azerbaijan (+4.8%), Armenia (+8.1% y/y), Turkey (+8.3% y/y), Ukraine (+27.5%) and Israel (+31.6% y/y). Meanwhile, visitors declined from Russia (-20.6% y/y) and Iran (-37.8% y/y). Visitors from the EU were up 26.7% y/y to over 72,400 visitors, with Germany, Poland and UK driving the growth. In 9M19, total international visitors stood at 6.0mn (+5.9% y/y), of which tourist arrivals reached 4.0mn (+5.8% y/y) persons. Meanwhile, tourism revenues stood at US$ 2.6bn (+0.5% y/y) in 9M19 according to NBG.
International reserves up 14.3% y/y and down 2.5% m/m in September 2019
Gross international reserves were up 14.3% y/y to US$ 3.6bn in September 2019 according to NBG. On a monthly basis reserves decreased by 2.5%, partly affected by US$ 40mn sale by NBG to curb GEL depreciation.
IMF maintains Georgia’s economic growth projections
IMF has updated its World Economic Outlook and projects global growth at 3.0% for 2019, its lowest level since 2008–09 and a 0.3ppts downgrade from the April 2019 World Economic Outlook. Notably, IMF has kept Georgia’s economic growth projection at 4.6% for 2019 and expects 4.8% real GDP growth for 2020 and an average 5.1% gowth over 2021-24.
