Page 26 - GEORptNov18
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5.1.2   Current account dynamics
Georgia’s current account deficit at 12.9% in Q4 2017
Georgia's current account deficit accounted for over 10% of GDP in 2017, from 12.9% a year earlier, CEIC data reported. In nominal terms, the deficit contracted to $1.3bn from $1.9bn.
The small country's economy is reliant on imports of oil and gas and added-value goods like machinery, therefore a high trade deficit financed partly through borrowing and investments continues to be a problem for Tbilisi, even as its economy has flourished. The main contributor to the decline in the deficit was services, largely thanks to tourism revenue growth.
The current account gap will grow to 10.5% of GDP this year and will remain in the double digits at 10.2% of GDP in 2019, if the IMF estimates prove correct. Earlier in April, the Fund expected the country’s external deficit to narrow to 9.5% of GDP.
5.1.3   Capital flows
12-month net remittance to Georgia 20% up y/y to $1.3bn in Aug
Net money transfers from abroad to Georgian households (largely wage transfers) in the 12 month-period ending August increased by nearly 20% y/y to $1.30bn according to   bne Intellinews c   alculations based on central bank data.
Gross inflows were up 19% y/y to $1.53bn, equivalent to roughly 10% of the country’s GDP. Wage remittances finance the largest part of the current account gap that exceeded 10% of GDP last year and remains a key problem this year as well.
Georgia’s GDP is set to rise from some $15bn in 2017 to $16bn this year.
Of the $1.53bn gross transfers in the rolling 12 months, $463mn (up 5.7% y/y) were transfers from Russia. Gross transfers from other countries surged by 25% y/y to $1.07bn. Since January 2015, transfers from countries other than Russia exceeded remittances from Russia.
In August alone, the volume of money transfers from abroad to Georgia rose by 11.4% y/y to $135.6mn. In the same month, $18.9mn (down 2.5% y/y) was transferred out of the country.
26  GEORGIA Country Report   November 2018    www.intellinews.com


































































































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