BAKU, Azerbaijan, Jan. 5
By Maryana Akhmedova – Trend:
Georgia’s economic growth in November 2021 has increased, compared to the 2019 level, Trend reports, referring to a macroeconomic review from TBC Capital.
Georgia’s real GDP in November 2021 increased to 12 percent, compared to 6.9 percent over the previous month, mainly due to the low baseline effect, the report said.
However, the recovery covered all sectors except construction, which resulted in reduced capital expenditures by the state, TBC Capital noted.
While the dynamics of exports, imports, tourism, and remittances were strong, like the fiscal factor, loans lending in November 2021 decreased, the report noted.
According to TBC Capital, this is a result of the slowdown in loans in the business segment, especially in the corporate direction. However, a record breaking recovery was observed in the corporate sector in the second and the third quarters of 2021.
Meanwhile, according to the statistics, the balance of trade in goods, tourism and remittances improved significantly in the third quarter of 2021, compared to the same period of 2020, as did the overall current account deficit, the report said.
As for the financial side, only reinvested income from direct investments made a significant contribution, since equity investments were very low. Moreover, the non-bank private sector and the National Bank were significant sources of funding.
On the banking sector, foreign liabilities decreased, while foreign currency holdings increased by $71 million, after a record decline of $501 million in the second quarter of 2021, TBC Capital noted.
Meanwhile, high annual inflation in Georgia, in line with the TBC Capital’s expectations, was determined only by a low base effect, while the monthly growth rates of prices on an annual basis were below the target, as over the previous month.
TBC Capital once again affirmed that the depreciation of Turkish lira will not necessarily affect the depreciation of Georgian lari, and have a negative impact on Georgian economy.
“The only question remains about agricultural products, as prices in this sector are rising much more moderately in Turkey. However, the share of agricultural products in Turkish exports to Georgia is only about 5 percent. As for tourism, exports and remittances, the negative impact of the weak lira in this regard is even more controversial,” TBC Capital added.
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