Page 23 - GEORptJul18

Georgia reports sharp upturn in trade with CIS countries
Georgia’s exports reached $1.28bn in the first five months of 2018, marking a 28% y/y increase, with exports to CIS countries making a significant contribution, according to the state statistics office Geostat.
The rise outstripped the 23.4% increase in imports during the same period, although imports continued to dwarf exports at $3.61bn in January-May.
The increase in both exports and imports pushed up Georgia’s external merchandise trade (excluding non-declared trade) to $4.90bn during the five months, amounting to a 24.5% y/y increase, while Georgia’s negative trade balance amounted to $2.32bn or 47.5% of external trade turnover.
CIS countries still represent the main export market for Georgian products, absorbing 45.5% of exports or $585mn, a 52.3% y/y increase. Indeed, the beginning of this year has seen a revival in trade with the CIS, a body Georgia left in 2008 after a brief war with Russia. Georgia’s imports from the grouping of former Soviet countries were up too, albeit by a more modest 24% to $1.09bn.
Georgia also increased trade with EU countries, to $1.34bn, up 23% y/y, with exports up by 13.7% to $295.7mn and imports by 25.9% to $1.05bn.
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
Georgia reports 13% y/y increase in remittance inflows in May
A total of $130.4mn worth of money transfers from abroad were sent to Georgia in May 2018, 13% more than in May 2017, data from the National Bank of Georgia showed.
EU countries accounted for the largest share of the total, $44.3mn, outstripping the $37.84mn sent from Russia during the month, though Russia remained by far the single largest source of money.
Within the EU, the largest sums were sent back from Italy ($11.68mn) and Greece ($11.71mn). Also among the top five countries from which Georgians sent home money were the US ($12.11mn) and Turkey ($10.02mn).
23 GEORGIA Country Report July 2018 www.intellinews.com