Baku, Azerbaijan, August 17
By Tamilla Mammadova – Trend:
Foreign Direct Investment (FDI) inflows at 6.6 percent of GDP remained the key source of financing in Georgia in 2Q2019, TBC Bank of Georgia told Trend.
"At the same time, over the first six months of 2019 the National Bank of Georgia bought $216 million or around 3 percent of the same period GDP, indicating that the inflows were sufficient even for higher growth," said the bank.
According to bank, the trade balance improvement trend in Georgia continued in 1Q2019 as well, with the deficit to same quarter GDP ratio at 6.2 percent - being historically low with an improvement of 5.7 percentage points year-on-year and with the strongest contribution of the trade in goods.
"The positive tendency has likely sustained in 2Q as well, judging from the trade balance, tourism and remittances inflows as above described figures suggest. Over the last 4 quarters (3Q2018-2Q2019), the current account deficit to GDP ratio stood at 6.4 percent, also improving by 1.3 percentage points compared to the previous quarter," said the bank.
As the bank said, recent restriction on flights from Russia to Georgia will have substantial impact on tourism inflows. However, according to TBC Research, taking into account the increase in tourism inflows from other destinations and the strengthening external balance, the impact should be manageable.
TBC Bank, together with its subsidiaries, is the leading universal banking group in Georgia, with a share of 38.5 percent of loans and 41 percent of non-bank deposits as of June 30, 2019.