Page 21 - GEORptMay18

5.1.2 Current account dynamics
Georgia’s current account deficit at 12.9% in Q4 2017
Georgia's current account deficit accounted for 12.9% of the country’s nominal GDP in December 2017, down from 17.3% a year earlier but up from 3.1% in the previous quarter, CEIC data reported. In nominal terms, the deficit contracted by 19.9% y/y to $524.9mn.
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.
5.1.3 Capital flows
Remittances to Georgia up 16.3% y/y in December
Remittances to Georgia increased by 16.3% y/y to $138.4mn in December, the country's central bank said in a report on January 15. The sums are an important source of revenue for many Georgians who are underemployed or unemployed and rely on transfers from relatives working abroad. Georgia's official unemployment rate has hovered around 12% for years, but observers believe that as much as half of the workforce is underemployed and engaged in either subsistence agriculture or small business ownership. Rises in remittances normally reflect in consumption statistics.
In 2015 and early 2016, remittances dropped as a result of a depreciation of the Russian ruble and Turkish lira and the economic slowdown in Russia and Turkey, two of the largest sources of remittances. Russia accounted for a third of total remittances sent, followed distantly by the US, Italy, Greece, Israel and Turkey.
5.1.4 Gross international reserves
Gross international reserves in Georgia amounted to GEL2,480.1mn in March, down from GEL2,878.2 in January 2018. International reserves averaged GEL1,211.2mn from 2006 to 2018, reaching an all-time high of GEL 3,219mn in October 2017.
21 GEORGIA Country Report May 2018 www.intellinews.com