FDI up 10.6% y/y in 1H16
FDI in Georgia hit US$ 445mn (-3.8% y/y) in 2Q16, according to GeoStat’s preliminary figures. Similar to previous quarters, the transport and communications sector was the largest FDI recipient at US$ 175mn (-15.8% y/y, 39.3% of total) in 2Q, followed by the financial sector at US$ 60mn (+15.3% y/y, 13.5% of total), the energy sector at US$ 46mn (+41.2% y/y, 10.3% of total), and the construction sector at US$ 19mn (+69.4% y/y, 4.3% of total). Azerbaijan topped the list of investors with US$ 146mn, followed by United Kingdom at US$ 64mn, Czech Republic at US$ 36mn, and Turkey at US$ 28mn. Overall, FDI in 1H16 stood at US$ 834mn, up 10.6% y/y.
International reserves up 1.1% m/m in August 2016
Gross international reserves increased 1.1% m/m (+US$ 32.1mn) and 17.3% y/y (+US$ 425.2mn) to US$ 2.89bn as of end-August 2016, according to NBG. The increase in reserves was attributed to NBG’s FX interventions and operations with commercial banks.
NBG cut its policy rate to 6.50%
At its meeting on September 7, 2016, NBG’s monetary policy committee cut its policy rate by 25 basis points to 6.50%, citing that the monetary policy decision is based on the macroeconomic forecast, according to which the phasing out of tight monetary policy must continue in order for inflation to reach its target rate of 5.0%. The next committee meeting is scheduled for October 26, 2016.
