FDI at US$ 1.02bn in 9M15
FDI in Georgia hit US$ 1.02bn (-17.3% y/y) in 9M15, according to GeoStat’s preliminary figures. In 3Q15, FDI stood at US$ 489.0mn (-32.6% y/y and +37.7% q/q). Similar to previous quarters, the transport and communications sector was the largest FDI recipient at US$ 218.5mn (+64.8% y/y, 44.7% of total) in 3Q, followed by the financial sector at US$ 72.7mn (+78.6% y/y, 14.9% of total), and the construction sector at US$ 62.5mn (-65.8% y/y, 12.8% of total). Azerbaijan topped the list of investors with US$ 172.7mn, followed by Netherlands at US$ 55.4mn, and Turkey at US$ 42.9mn.
Parliament approved 2016 state budget
On December 11, 2015, the Parliament approved the 2016 state budget, setting total inflows at GEL 10.16bn (+2.5% y/y) and total outflows at GEL 10.16bn (+6.0% y/y), leading to a neutral effect on government deposits. In 2016, the state budget projects 3.0% economic growth and sets the fiscal deficit at 3.0% of GDP (unchanged y/y). Targeted tax revenues are set at GEL 7.98bn (+7.8% y/y), accounting for 23.3% of projected GDP. The government plans to raise GEL 1.28bn in loans, of which GEL 200mn constitute net domestic borrowing and the rest in the form of long-term concessional borrowing from IFIs. Total public debt to GDP ratio for 2016 is projected to reach 42.6% (-0.5ppts y/y), of which external public debt is projected at 33.9% of GDP (-0.2ppts y/y).
Gross international reserves stood at US$ 2.5bn as of Nov-2015
Gross international reserves increased 1.2% m/m (+US$ 30.5mn) to US$ 2.5bn (-4.9% y/y) as of end-November 2015, according to NBG. Net foreign assets of NBG reached 2.3bn (+1.7% m/m and -3.8% y/y). The growth in reserves was attributed to government FX operations, fully compensating for NBG’s US$ 20mn FX intervention in November.
Property registration up 3.0% y/y and company registration up 2.8% y/y in Nov-2015
Property registration (commercial and residential real estate) increased 3.0% y/y (-5.1% m/m), reaching 44,123 units in November 2015, according to National Agency of Public Registry. Notably, a sharp increase in primary properties (+19.6% y/y, 18.8% of total) fully compensated for a decrease in secondary property registration (-0.3% y/y, 81.2% of total).
Company registration increased 2.8% y/y (-2.2% m/m) to 3,600 units in November 2015. Out of newly registered companies, 97.2% were business legal entities, while 2.8% comprised non-entrepreneurial (non-commercial) legal entities.
GWP – first non-financial Georgian company assigned the same rating as the sovereign
On December 8, 2015, Fitch assigned a ‘BB-‘ rating to Georgian Water and Power (GWP), the leading company in water and waste water treatment services in Georgia and the sole supplier of those services in Tbilisi. The rating reflects trust in the company, its financial sustainability, and solid management team. GWP is the first non-financial, private Georgian company to be assigned the same rating as the sovereign, the highest that can be granted to a company in Georgia. Galt & Taggart was the provider of rating advisory services to GWP, heading up both the preliminary process and the final stage – the company presentation to Fitch Ratings.
