TBC Bank Chief Economist Otar Nadaraia thinks that the GEL strengthening tendencies will continue until the end of the year. Among the main factors stabilizing the national currency, he cites the recovery of tourism, the growth of exports and remittances, as well as the tighter monetary policy of the National Bank.
Otar Nadaraia says that there is a boom of economic recovery in the world, at the same time, the pace of recovery in relation to Georgia will be more optimistic than expected. According to TBC, the country's economy will grow by more than 5% this year.
"We see that the tourism sector is improving amid easing restrictions. Imports are also growing, although growth in exports and remittances is stronger than expected. Our forecast for economic growth is the highest - 4.7%, but now we have to look back and I think growth this year will definitely be more than 5%.
At the same time, when we talk about strengthening the GEL, we should not miss the policy of the National Bank. We know that the NBG has tightened monetary policy, which makes the lari less attractive and supply reduced, but on the other hand, because we operate in a multi-currency system where both the euro and the dollar are, the recovery of foreign currency loans was important and I think it will be even more pronounced in May. Thus, the recent strengthening of the gel is a combination of factors. It should be noted that in this case, we have not had a weakening of the dollar in international markets or other developments in trading partner countries, so this is a purely domestic phenomenon.
Overall, in terms of economic recovery, our forecast is optimistic. We think the recovery will continue and intensify. We do not share the opinion that tourism will take a long time to recover. We see activity at a high pace, so I would bet on strengthening the lari by the end of the year," Otar Nadaraia told Business Morning.
For reference: as of May 28, the official value of 1 dollar is 3.2779 GEL, and 1 euro is 3.9922 GEL.
In 2021, the NBG conducted a total of 7 currency auctions to reduce the GEL exchange rate volatility and sold $ 242.9 million.
