Page 6 - GEORptOct21

Georgia’s central bank left its refinancing rate unchanged at 10% following a meeting of its monetary policy committee on September 15. NBG expected that average inflation in 2021 would be higher than 9%. But it expected headline inflation to ease through 2022 and gradually approach its medium-term target of 3%.
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.
E-commerce in Georgia increased more than threefold year-on-year in 2020 to nearly $45mn, a Galt & Taggart report states. The Covid-19 pandemic has boosted Georgia’s e-commerce market, as lockdowns encouraged many to purchase online for the first time or increase the frequency of online purchases. The lockdowns also forced Georgian companies to expand their online offerings.
On the trade front, Georgia's exports rose by nearly one-third year-on-year in June, while PPI for industrial goods rose 15%, Galt & Taggart reported. Overall, in 1H21, the trade deficit was up by 14.5% y/y to US$ 2.4bn, as exports increased by 25.2% y/y to US$ 1.9bn and imports increased by 18.9% y/y to US$ 4.3bn.
Georgia's foreign trade in the first six months of 2021 increased by over one-fifth year-on-year, Geostat reported on July 13. Furthermore, it was 0.5% above the pre-coronavirus crisis trade turnover seen in H1 2019.
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, noting that violence was unacceptable in an election campaign, the US Embassy in Tbilisi stressed that the Georgian government bore “primary responsibility” for ensuring a free, fair, competitive election that voters could have confidence in.
6 GEORGIA Country Report October 2021 www.intellinews.com