BAKU, Azerbaijan, Oct. 19
By Maryana Akhmedova – Trend:
Georgia’s TBC Capital published a weekly update on the country’s economic growth, Trend reports via TBC Capital.
According to the report, the fourth wave of the COVID-19 pandemic slowed down tourism recovery in August 2021, when Israel considered Georgia as dangerous to visit due to growing coronavirus cases.
Tourist flow from Israel resumed from September 2021. Thus, overall September inflows remained broadly flat reaching 50.8 percent, compared to 2019, the report said.
The remittance inflows growth in September 2021 equaled 8.8 percent year-on-year as expected, TBC Capital said.
“Unlike tourism and remittances, trade in goods increased at a much stronger rate, indicating a higher than assumed September GDP growth,” the report said.
As per usual, the rebound led to the worsening of the trade balance by 8.1 percent month-on-month and 31.8 percent year-on-year.
In contrast to tourism and remittances, September's export-import figures exceeded expectations significantly, indicating higher economic growth. At the same time, naturally, high growth has led to declining in the trade balance, the report said.
Overall, the monthly change in exports, imports, tourism, and remittances was negative - about $74 million, which, compared to other periods, is comparable to the $60 million sold by the National Bank of Georgia (NBG) in September 2021, TBC Capital noted.
According to the chief economist of TBC Capital, the reason for the pressure on the Georgian lari was the post-election expectation of further depreciation, rather than the deficit calculated according to the main components of the current account.
In spite of the record high-interest rate differential, there was a much larger increase in foreign currency deposits from August through September 2021, compared to the Georgian lari. Based on the daily data of the NBG’s monetary aggregates, the increase continued in October.
According to TBC Capital, foreign currency lending has also been restored. Even during the COVID-19 pandemic, the Georgian lari real effective exchange rate is often more closely linked to changes in the currency composition of loans than to current account dynamics.
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