Page 5 - GEORptAug22

amounted to $568.2mn, which is $435.7mn more than in the same period last year, the National Statistics Agency reported, citing preliminary data. Thus, the figure increased by 4.3 times. Spain was the top contributor to FDI, followed by the United Kingdom.
Total international tourism revenues in Georgia surged by 281% y/y to $1.1bn in the first half of this year, reaching 78.5% of the revenues recorded in the same period of pre-pandemic year 2019, according to Galt & Taggart’s Tourism Market Watch report.
Money transfers from Russia to Georgia soared 6.5 times in Q2 to $678mn, equivalent to 3.6% of the country’s GDP recorded last year, the National Bank of Georgia (BNM) reported. The spike in financial flows can safely be attributed to the flow of migrants from Russia who have found at least temporary shelter in Georgia from consequences of the Ukraine war. The macroeconomic impact made by financial flows of such a magnitude cannot be ignored. It should be seen in retail sales, GDP growth and exchange rate.
Georgian inflation hit 12.8% in June, according to the Geostat. Compared to the previous month, consumer prices rose by 0.2%. The annual inflation was mainly exerted by price changes in transport, food and non-alcoholic beverages and energy. TBC Bank sees year-end inflation at 7.4% (down from 8.5%).
The Monetary Policy Committee of the National Bank of Georgia (NBG) at its meeting on June 22 left the refinancing rate unchanged at 11%. In its decision, the NBG said that "high inflation and inflationary risks remain an urgent global challenge". The bank said sanctions imposed on Russia in response to aggression against Ukraine and delays in deliveries, as well as sharp restrictions on exports from Ukraine due to the war, have significantly increased prices for food, raw materials and energy on world markets. Georgia’s central bank is in a position to adopt a more dovish position and will perhaps cut the refinancing rate from 11% currently to 10.25% by the end of the year, according to CEO of Georgian bank TBC.
In bank related news, Georgian commercial banks' financial reports indicate that 14 banks in the country together earned a net profit of GEL836mn ($285mn) in the first half of 2022.
According to the Banking Association of Georgia, 95% of these profits were attributed to the country's two largest banks, TBC and Bank of Georgia.
In 1H22, the banks received interest income of GEL2.7bn ($919mn), most of which stemmed directly from loans made to citizens and businesses.
Commercial banks in Georgia loaned GEL43.65bn ($15.7bn) and received deposits of GEL38.27bn ($13.8bn) in June, according to latest data from NBG. The volume of loans grew by 1.24% m/m, while deposits increased by 3% m/m.
On the political front, Georgian Dream party MPs Sozar Subari, Mikheil Kavelashvili and Dimitri Khundadze resigned the party and parliament at the end of the majority meeting on 28 June. According to the former MPs, “there are great powers” who want to organise a revolution in Georgia, “change the government elected by the people” and replace it with people who “are directly responsible for the numerous crimes committed in 2004-2012”, hinting at the opposition United National Movement (UNM).
5 GEORGIA Country Report August 2022 www.intellinews.com