Page 6 - GEORptDec21

COVID pass to enter many establishments. The pass will only be issued to those who are fully vaccinated or have recorded a negative PCR test within the last 72 hours.
Georgia’s annual inflation pick up to 12.8% y/y in October from 12.3% y/y in September. The driving forces of high inflation was mainly a result of one-off factors, such as significant increases in prices of food and oil on international markets. Annual PPI for industrial goods was 16.8% in August 2021, up from 16.4% in previous month, according to Geostat.
The Monetary Policy Committee of the National Bank of Georgia (NBG) on October 27 kept its key refinancing rate unchanged at 10% for a second time in a row, after raising it by 0.5% to its highest level in 13 years in August. NBG stressed that it is keeping the monetary policy stance tight, as increased inflation remains a challenge for Georgia. Noting that consumer prices increased by 12.3% in September, the NBG said it expected inflation to remain high through February 2022.
The aggregated net profit of Georgia’s banking system in January-October rose by 38% compared to the same period in 2019, to GEL 1.76bn ($567mn), according to the central bank. In the same period last year, the banks reported GEL85mn net losses, caused by the mandatory provisions set aside for the expected deterioration in the quality of their loans. Since then part of the provisions was released – which contributed to the robust profits in 2021.
The banking system remains adequately capitalised and liquid, according to the IMF. 3Q21 earnings for the two largest banks- TBC and Bank of Georgia - saw robust growth driven by a solid operating performance.
On the trade front, the central bank took note of some positive developments including a 25% annual increase in exports in January-October – 11% higher year on year. Overall, in 10M21, the trade deficit increased by 20% y/y compared to 2020, as exports were solid and made the biggest contribution.
Foreign direct investment (FDI) in Georgia amounted to $234.2mn in the second quarter of 2021, marking a 2.6% y/y decrease.The figure represented a recovery in relative terms from Q1, when FDI was down a whopping 28% y/y.
On the political front, in his first court appearance, Mikheil Saakashvili has told a court in Tbilisi he was "tortured" during his pretrial detention before the judge adjourned the proceedings until December 23 amid scuffles outside the court between police and the former president's supporters. Saakashvili ended his 50-day hunger strike earlier this month after authorities agreed to move him to a military hospital. The pro-Western politician, who declared a hunger strike on October 1, was arrested after returning to Georgia, having lived abroad for years.
Meanwhile, Georgia’s Prime Minister Irakli Gharibashvili has announced tighter regulations will be enforced on online casinos. The companies running online casinos will pay higher taxes, advertising will be banned and the minimum age of the customers will increase to 25 years.
6 GEORGIA Country Report December 2021 www.intellinews.com