Page 20 - GEORptMar19

5.1.1 Import/export dynamics
Georgia’s trade gap narrows as imports shrink in Nov-Jan
Georgia’s trade gap contracted by double-digit rates in November and December and by 6% y/y in January, as imports posted negative dynamics in each of the three months. But the trade deficit remains a threat to the country's macroeconomic stability, say economists.
The improvement comes after the country’s trade gap widened by 15% y/y to $5.9bn (some 37% of the country’s GDP in 2018) in the 12-month period as of October 2018. The annual rise in the rolling 12-month trade gap eased to 9.2% y/y as of January already.
The trade and current account deficits are a major threat to Georgia’s macroeconomic stability and exchange rate. Georgia's central bank mas managed to avoid any significant depreciation through 2018, though.
Exports increased by robust rates of 14%-17% y/y in November and December and by 7.3% y/y in January, the statistics office informed. The 12-month exports as of January were 21.2% up y/y, having increased visibly faster than the imports that advanced by only 13.3% y/y under the same metrics. In fact, exports have increased faster than imports since April 2017 and exports' performance (measured as the differential between exports’ and imports’ annual growth rates) has been as high as 20pp in some of the months -- but the volume of imports is so much higher than the exports ($9.1bn versus $3.3bn in the 12-month period ending January) that even moderate growth in imports results in wide supplementary trade deficits.
20 GEORGIA Country Report March 2019 www.intellinews.com