Page 19 - Small Stans and Causcasus Outlook 2022

Over the four-quarter period to September 2021, the current account
gap in Georgia was $1,850mn – or 10.6% of GDP – down from
$2,053mn (12.3% of GDP) in the four-quarter period to June 2021.

During four quarters of almost non-existent tourism activity, Georgia’s
four-quarter current account deficit more than doubled from $830mn (as
of Q3, 2019) to nearly $2bn (as of Q3, 2020), before starting to decline
only in the third quarter of 2021.

Strong advance of non-tourism exports, gradual recovery of tourism
(depending on the mobility restrictions) and a steady increase in
remittances are likely to keep compressing the deficit under the
double-digit level. But the return in the low single-digit area seems still a
rather remote, or at least uncertain, scenario as long as the COVID-19
crisis is far from its end.

The gross external debt of Georgia amounted to $21.0bn as of the end
of September, accounting for 120% of the four-quarter GDP calculated
at the same moment. In absolute terms, Georgia’s debt has increased
marginally during 2021 after a sharp advance in 2021. In relative terms
(% of GDP), the country’s indebtedness actually declined from 134.6%
at the end of March 2021.

Compared to September 2019, Georgia’s gross external debt
increased by 17.5% ($3.1bn) and the debt-to-GDP ratio advanced by
16.6pp.

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