Page 6 - GEORptJul22

The Trans-Caspian International Transport Route (TITR) is gaining importance as trade through its member states is growing amid the necessity for more trade route volume that bypasses heavily sanctioned Russia.
Georgia's trade deficit hit $2.7bn in the first five months of 2022, according to preliminary data of the National Statistics Service of Georgia (Geostat), which was published on June 20.
Compared to the corresponding period of the previous year, Georgia's foreign trade increased by 37.4% and amounted to $6.93bn in January-May. During the reporting period, exports increased by 37.5% to $2.11bn, while imports increased by 37.3% to $4.82bn. The negative trade balance was equal to 39.1% of the total foreign trade turnover.
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, 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.
The Georgian government has changed its inflation forecast for the current year; now it is expected at 9.1% according to the press service of the Cabinet of Ministers of Georgia. This is twice as high as the forecast when approving the state budget for 2022 – 4.5%. According to the updated forecast, inflation will return to the target in 2023.
According to the National Bank, inflation in the second quarter of 2022 will average 10.5%, in the third quarter it will slow down to 7.85%, and in the fourth to 7%. Georgian inflation hit 12.8% in April, according to the data of the National Statistical Service of Georgia, which was published on May 3. Compared to the previous month, consumer prices rose by 1.8%.
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.
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).
Citizens of Georgia flocked onto Tbilisi's streets and Rustaveli Avenue again in a pro-EU rally and to protest against the Georgian Dream party. Organisers of a pro-European rally in front of parliament on June 24 gave Prime Minister Irakli Garibashvili and his government a week to resign. Organisers announced that the next rally would take place on July 3, noting that if the demonstrators' demands were not met, "we will not disperse until the oligarchy disintegrates".
6 GEORGIA Country Report July 2022 www.intellinews.com