Page 27 - Caucasus Outlook 2024

However, concerns about the potential departure of these deposits prompted the National Bank to increase liquidity requirements for Russian citizen deposits from 40% to 80% in May.
In October 2023, Georgian banks set a record, with loans reaching GEL50.1 billion, reflecting a monthly increase of GEL953 million.
The Georgian National Bank's international reserves reached $5.1 billion in November 2023, signalling an improved foreign currency balance, attributed to foreign exchange inflows.
For the first eight months of the year, Georgian banks collectively reported a net profit of GEL1.81 billion.
The two largest banks, TBC and Bank of Georgia, reported strong unaudited profits. TBC reported a net profit of GEL803.75 million for 9M23. Bank of Georgia reported an unaudited 9M23 profit of GEL981.9 million, specifying that it is the standalone profit of Bank of Georgia, not the consolidated group profit.
In its summer assessment, Fitch, the international rating agency, maintained Georgia's sovereign credit rating at ‘BB’, retaining a "positive" outlook.
Focusing on governance quality, Fitch notes Georgia's pursuit of EU candidate status, contingent on fulfilling 12 priorities. The rating agency highlights tension with the West due to Georgia's stance on relations with Russia. Fitch maintains its view that migrant spending significantly drives Georgia's economic activity.
3.1.3 Industry
In the third quarter of 2023, Georgia saw its foreign direct investments (FDI) drop to USD 316.0 million, a significant decrease of 61.5% compared to the same period in 2022. This decline was mainly due to reductions in debt instruments and reinvestment. However, there was a small increase in equity investment, which rose by 2.5% to USD590.3 million. Reinvestment, on the other hand, fell by 30% to USD329.2 million.
The United States was the top investor in Georgia during this period, contributing USD51.8 million, which is 16.4% of the total FDI. The United Kingdom and the Netherlands followed, investing USD45.8 million and USD45.3 million, respectively. The five biggest investor countries together accounted for 58.7% of the total FDI.
The financial and insurance sector received the most FDI, getting USD80.2 million or 25.4% of the total. The transport sector was next with USD61.9 million (19.6%), and the information and communication sector received USD41.0 million (13.0%). These top five sectors made up 77.3% of the total FDI in Georgia.
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