Georgia’s National Bank says lending activity continues to grow, with the annual growth of the credit portfolio reaching 14.8% in August. While the recent acceleration partly reflects a base effect, the regulator notes that lending remains on an upward trend even after this factor is excluded.
Interest rates on some loans issued in Georgian lari have declined due to lower credit and liquidity risk premiums, supported by strong economic growth, increased lari-denominated lending and improved market liquidity. These changes have particularly benefited long-term loans, including mortgages, contributing to faster growth in this segment.
However, interest rates on relatively short-term lari loans have increased under the impact of tight monetary policy, offsetting some of the easing in other lending categories. The National Bank says borrowing costs therefore vary depending on the loan type and currency, rather than following a uniform trend.
The regulator also expects rising global interest rates to gradually affect Georgia’s domestic financial conditions, potentially tightening lending conditions for foreign-currency loans. This could increase borrowing costs for customers, although the National Bank’s report does not specify the timing or scale of the expected changes.
