Page 6 - GEORptNov21

Georgian health officials are alarmed and concerned by the recent low vaccination rate that would lead to a high number of deaths when the new wave of the virus started. According to data from Worldometer, Georgia ranks 13th worldwide in COVID-19 deaths per million over the past week with 62/mn, behind only Armenia, Romania, Bulgaria and a handful of Caribbean nations.
Georgia’s annual inflation eases to 12.3% y/y in September after eight months of gains. 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 Georgian banking sector saw monthly net profit surge 2.4x y/y and 31% m/m in August, as strong growth in core revenue was combined with the second-largest monthly reversal in loan loss provisions this year.
The aggregated net profit of Georgia's banks more than doubled in June compared to the previous year, to Georgian lari (GEL) 295mn ($92mn) - it amounted to the biggest profit ever recorded by the banks in the country’s history. The banking system remains adequately capitalised and liquid, the International Monetary Fund (IMF) said in its Concluding Remarks after Article IV Consultations with the country. 2Q21 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 24% annual increase in exports in January-September – 9% higher year on year. It also cited 22% growth in imports, against the backdrop of increased domestic demand in the country. Overall, in 9M21, the trade deficit was up by 19.9% y/y (down 0.5% vs 9M19) to $4.0bn, as economic recovery and higher world commodity prices boosted imports, while exports were also solid.
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, thousands of people gathered in the centre of the Georgian capital on October 14 demanding the release of jailed former Georgian President Mikheil Saakashvili, whose detention earlier this month deepened a protracted political crisis in the South Caucasus country. The pro-Western politician, who declared a hunger strike on October 1, was arrested after returning to Georgia, having lived abroad for years.
6 GEORGIA Country Report November 2021 www.intellinews.com