Home
Category
TV Live Menu

• ახალი ამბები ბიზნესში •

Loading data...

TBC Capital Published Updated Macro-Sectoral Overview

614d85a96b214
Natia Taktakishvili
24.09.21 11:30
435
TBC Capital published updated macro-sectoral overview. According to the report, contribution of remittances, credit, exports and fiscal stimulus to growth were all sizable The effect of tourism inflows and FDI on GDP were minor Important to note, low share of tourism inflows was primarily caused by the unfavorable dynamics of the first quarter Real GDP growth compared to 2019 was positive as well and amounted to 4.8%.

The report reads, that due to the surging Covid cases in Georgia tourism recovery has slowed down Main contributor to the slowdown was the fall of inflows from Israel In August, the largest share of tourism inflows came from the EU September preliminary data indicates that compared to 2019 the growth will be similar to the previous month For the overall year 2021, recovery of 37.5% of the 2019 inflows is expected In addition to the current year recovery projection, the monthly forecast dynamics also take into account the low base effect for July-September 2019, mainly due to the ban on flights from Russia.

As of the report, savings of the high income households increased during the pandemic During the second quarter of 2021, alongside opening of the economy and borders, dissavings further fueled the restart Dissavings were also boosted by falling yields on foreign deposits Due to high dollarization, USD rates have higher significance for savings rather than GEL rates.

Inflation is high according to both consumer as well as industrial products In the later period industrial price growth has stabilized, which in tandem with other factors indicates normalization of consumer price growth.

Out of 305 products in the consumer basket prices have increased for 87.9%, the reasons for this growth being:

• GEL depreciation mainly against US dollar and euro
• Commodity price hikes on international markets
• Elimination of subsidies on flour Increasing demand

Inflation forecast is based on the following assumptions:

• Slight appreciation of the GEL against major trading partners’ currencies, such as euro, US dollar etc. Price of the Brent to stay around 80$ per barrel
• Price stability on other consumer goods
• Real GDP growth to be 10.5% in 2021, and 6.0% in 2022

Arguments for lower GEL policy rate:
• Lower inflation
• Mitigation of the negative pandemic effects
• Recovery of the tourism inflows

More stable GEL Based on the past occurrences, expectation of the Fed rate hike does not necessarily translate into stronger USD.

Since May, NBG has had minor interventions in the FX market During the pandemic, most of the NBG interventions have been funded by government foreign debt. According to TBC Capital’s estimations, based on the projection of tourism inflows, trade balance, remittances and foreign debt the FX inflow-outflow balance will be positive in 2021..