Page 33 - GEORptAug21

Since September, the GEL fluctuations have increased to an even greater extent with it becoming clear that a second wave of the coronavirus was imminent in the country, with another lockdown set to follow.
It was during this period that the NBG intensified its foreign exchange interventions. As a result, $500mn in FX auctions was sold in the fourth quarter.
In a report published in December, Tao Zhang, deputy executive director of the International Monetary Fund (IMF), noted that the need for interventions in Georgia would continue into 2021. On January 6, the NBG held its first foreign exchange auction, selling $30mn.
5.2 FDI
Georgia - FDI 2013 2014 2015 2016 2017 2018 2019 2020* 2021*
FDI ($ mn)
1,039.2 1,837.0 1,728.8 1,652.6 1,978.3 1,306.3 1,310.8 616.9 125.4
FDI (% of GDP)
5.93 10.84 11.89 11.27 11.88 7.5 7
Source: Geostat, CEIC
FDI in Georgia shrinks further with Q1 decline of 28% y/y
Foreign direct investment (FDI) in Georgia amounted to $125.4mn in Q1 2021 according to preliminary data announced by statistics office Geostat. This was 28% down compared to the first quarter of 2020, when the tally was 44% down compared to the first quarter of 2019.
FDI in Georgia halved in 2020 compared to 2019, to $620mn, accounting for only a third of the annual average of $1.8bn seen between 2014-2017.
Most FDI (75%) in the first quarter was seen in the financial sector, and the origin of investments (70% sourced from the UK) supports the hypothesis that the figure accounts for deals involving the country’s two banks, TBC and Bank of Georgia, which are controlled by UK-registered holdings. The investments in energy, although the second-biggest sector and boasting a sharp increase, remained very weak compared to the needed investments, at only $35.5mn.
A reduction in the amount of reinvestment and the transferring of ownership from non-resident to the resident units in several companies are considered as main reasons for the FDI decline, Geostat explained. Its statement indicated that Georgian billionaire Bidzina Ivanishvili might have continued to transfer
33 GEORGIA Country Report August 2021 www.intellinews.com