According to TBC Research, external inflows picked up sharply in November, supported by the strong rebound in exports (+25.2% YoY in USD), the continued recovery in tourism receipts (+5.6% YoY in USD) and the steady growth of remittance inflows (+13.3% YoY in USD).
Overall, exports, tourism and remittance inflows increased by 16.3% YoY in USD, while growth stood at 19.6% YoY and 28.0% YoY when measured in EUR and GEL, respectively. Concurrently, imports increased only moderately, by 4.2% YoY in USD. As a result, the key components of the CA balance improved in November by an estimated 70 mln. USD.
Alongside the rebound in exports, the tourism industry has begun to recover earlier than expected on the back of strong growth from the EU, Georgia’s neighbors, including a recovery from Turkey, as well as growth from Central Asia, Israel and Middle Eastern countries. This increase was sufficient to offset the drop from Russia and Iran, and even to deliver a 10.3% YoY growth of tourists in November, after 7.8% in October and only 1.4% in July-September 2019.
In tourism inflows, starting from September 2019, the EU share has continued to surpass Russia, akin to remittances from the beginning of 2018. In Q3 2019, FDI inflows posted much stronger growth than expected (+13.7% YoY in USD) and stood at a solid 10.4% of GDP; mostly reflecting higher reinvested earnings, while equity inflows almost halved. Despite lower equity inflows, the level of FDIs, relative to GDP, remains well above the peer economies, even without potential largescale developments like the Anaklia Deep Sea Port or hydropower projects like the Nenskra HPP.
