Page 5 - GEORptSep22

Georgian Railways has registered the highest rail cargo volume in the past seven years, the country's national railway company reported.
The railway transported 6.8mn tonnes of cargo during the first half of the year, which is a 13.3% increase y/y.
Georgia exported a record $540mn worth of goods in July, marking a 40% y/y increase, Irakli Garibashvili announced. On August 15, during a cabinet meeting, the PM referenced the Georgian external trade turnover that amounted to $10.18bn between January-July 2022, making a 35.3% y/y increase.
The value of exports rose by 36.3% during the first seven months of the year to $3.09bn. Imports also grew by 34.8% y/y, amounting to $7.08bn.
The trade deficit reached $3.98bn, while the share of trade turnover hit above 39%.
Foreign direct investment in Georgia in the first quarter of 2022 amounted to $568.2mn, which is $435.7mn more than in the same period last year, Geostat reported, citing preliminary data. Thus, the figure increased by 4.3 times. Spain was the top contributor to FDI, followed by the United Kingdom.
FDI amounted to $1.242bn in 2021, making a two-fold increase y/y. UK is Georgia’s largest foreign direct investor at 48.6% ($603.6mn).
In Georgia, revenues from international visitors are running at a record high in 2022. According to the National Bank of Georgia, the country received $476mn in income from international visitors in July, which is almost $270mn more y/y. For the first time after the pandemic, the revenue from travel in January-July exceeded $1.6bn, constituting 87.4% of the figures for 2019.
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.
5 GEORGIA Country Report September 2022 www.intellinews.com