TBC Capital published Weekly Update from the Chief Economist. According to the report, the Georgian economy expanded by 8.2% YoY in March in real terms, while estimated 1st quarter seasonally adjusted annualized growth stands at 5.9%, being marginally but still above what TBC Capital's latest baseline would imply.
“Importantly, the NBG has continued to build buffers with a 127.9 million net USD purchase in March. While we do not have an April figure yet, it looks unlikely the recent GEL stability to be driven by the central bank FX selling interventions, as normally the NBG intervenes to curbs so-called undue volatility rather than determining the direction as such. Furthermore, based on TBC data, April migrant expenses and conventional tourism look substantially increased. Similarly, based on the latest deposit dynamics by currencies, we do not observe call it well-established switching to the FX often being a measure of worsened sentiments. Although, to mention, there was some decrease in non-resident holdings of GEL treasury securities.
As for the recent other data release, so far, the latest outlook tends to hold. Namely, some pick-up in inflation is evident, though the headline MoM still around the target, while imported and service components look to be gaining a momentum as well as the PPI measure of prices, which remains elevated for the 3rd month in a row. The credit accelerated further, especially FX one to legal entities, indicating a strong demand for the project financing”, - the document reads.
