Real GDP grew 3.0% y/y in July 2015 and 2.6% y/y in 7M15
Georgia’s real GDP grew 3.0% y/y in July 2015, after expanding 2.1% y/y in 2Q15 and 3.2% y/y in 1Q15, according to GeoStat’s rapid estimates. As a result, output growth in 7M15 averaged 2.6% y/y, from a higher base in 7M14 (6.4% y/y real growth). In July 2015, company registration increased 8.2% y/y, VAT turnover increased 7.4% y/y, tax revenues grew 6.9% y/y, trade deficit improved 12.3% y/y, and loan portfolio grew 15.0% y/y in real terms. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
Business sector supported strong job creation in 2Q15
In 2Q15, production of goods and services by the business sector grew 22.5% y/y to GEL 7.0bn, with industry, trade, and transport and communications sectors accounting for 60.7% of total production, according to GeoStat. Number of employed persons increased 12.0% y/y (+60.8 thousand persons) in 2Q15, with strong job creation in trade (+20.5% y/y), construction (+26.6% y/y), transport and communications (+11.0% y/y), real estate (+13.5% y/y), and hotels and restaurants (+24.1% y/y) sectors contributing most to employment growth.
International arrivals up 10.0% y/y in August 2015 and up 5.9% y/y in 8M15
After a 9.5% spike in July 2015, tourist arrivals posted another significant growth of 10.0% y/y to 0.85mn persons in August 2015, according to the Ministry of Internal Affairs. Significantly increased arrivals from Armenia (+24.7% y/y, 25.8% of total), Azerbaijan (+8.3% y/y, 22.4% of total), and Russia (+23.1% y/y, 18.8% of total) were the major contributors to growth. Arrivals from the EU increased 2.1% y/y in August 2015. In 8M15, total arrivals increased 5.9% y/y to 3.92mn persons.
Tax revenues posted a strong performance in 8M15, up 11.5% y/y
Consolidated budget tax revenues increased 6.9% y/y to GEL 576mn in August 2015 and 11.5% y/y to GEL 5.2bn in 8M15 (89% of 9M15 plan and 66% of annual plan), according to the Treasury Service. In 8M15, personal income tax revenues grew 15.5% y/y (27.0% of total), profit tax receipts +32.2% y/y (14.0% of total), VAT receipts 6.9% y/y (44.0% of total), excise tax receipts +4.5% y/y (10.5% of total), and property tax +10.7% y/y (3.4% of total). The rest – receipts from customs duties and other taxes – decreased, but they have a minor share in total tax revenues.
Inflation rate at 5.4% y/y and 1.0% m/m in August 2015
Annual CPI inflation rate was recorded at 5.4% in August 2015, according to GeoStat. Overall price changes were driven by price increases on food and non-alcoholic beverages (+6.3% y/y, +1.86ppts), health (+9.1% y/y, +0.88ppts), and alcoholic beverages and tobacco (+13.1% y/y, +0.68ppts), while prices in the transport category decreased 1.6% y/y.
Monthly inflation rate was 1.0% in August 2015. Price increases in food and non-alcoholic beverages (+2.0% m/m, +0.58ppts) and housing, water, electricity, gas and other fuels (+4.4% m/m, +0.33ppts) and a price drop in the transport category (-0.7% m/m, -0.09ppts) were the major drivers of the monthly inflation dynamics.
