Real GDP up 3.1% y/y in 2Q16
Georgia’s real GDP growth was 2.9% y/y in June 2016, and output growth averaged 3.1% y/y in 2Q16, higher than 2.6% growth in 1Q16, according to GeoStat’s rapid estimates. In 1H16 real growth was 2.9% y/y. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
NPLs at 3.7% y/y in June 2016
In June 2016, the banking sector loan portfolio increased 8.2% y/y, excluding the exchange rate effect (+11.1% y/y and +7.8% m/m in unadjusted terms), to GEL 16.4bn (US$ 7.0bn). Deposits increased 10.7% y/y, excluding the exchange rate effect (+13.5% y/y and +6.3% m/m in unadjusted terms), to GEL 14.3bn (US$ 6.1bn). NPLs stood at 3.7% in June 2016, up 0.3ppts y/y and down 0.1ppts m/m.
NBG cuts its policy rate to 6.75%
At its meeting on July 27, 2016, NBG’s monetary policy committee cut its policy rate by 25 basis points to 6.75%, citing that there is a need to ease monetary policy and to reduce key rate to neutral level of 6% in the medium term, if no other factors emerge. Annual inflation in June 2016 slowed more than expected to 1.1%, far below target level of 5.0% in 2016; This was largely due to the decrease in inflation expectations and larger-than-expected transmission of the lower world prices of oil and food. NBG also cited that inflation will remain low in following quarters and will reach the inflation target by the end of 2017, which is set at 4.0%. The next committee meeting is scheduled for September 7, 2016.
BGEO Group successfully completed the issuance of its New Notes
BGEO Group PLC, the holding company of JSC BGEO Group (the Company), has completed the issuance of its US$350,000,000 6.00% notes due 2023 (the New Notes). The Regulation S / Rule 144A senior unsecured Notes were issued and sold at an issue price of 99.297% of their principal amount on 26 July 2016. BofA Merrill Lynch and J.P. Morgan acted as Joint Lead Managers for the New Notes, with Galt & Taggart acting as Co-Manager. Dechert LLP and Baker & McKenzie LLP acted as legal advisors to the Joint Lead Managers and the Company, respectively. The New Notes are rated BB- (Fitch) and B1 (Moody’s). The New Notes are listed on the Irish Stock Exchange.
