TBC Capital published a Monthly Macro Update.
"The rapid estimate of economic growth came in at 11.1% in January, once again rather higher than our expectations;
Weaker domestic demand, as manifested in durables, has led to a deceleration in overall imports (adjusted for one-offs);
At the same time, non-resident non-cash expenses through TBC channels (our proxy for tourism revenues) and spending of Russians, Belarussians, and Ukrainians with TBC cards (our proxy for migrant expenses) remained flat in February, while instant money transfers came out robust, as well as real credit activity;
Altogether, net foreign currency inflows improved further in February while the trade deficit in the first two months of the year narrowed to its lowest level in the past decade;
As for the domestic components affecting the GEL, which we call sentiments, demand for FX assets appears to have normalized as net foreign currency purchases on the market have moderated, and deposit conversions have been relatively less pronounced;
We also note that Georgia’s estimated risk premium has stabilized on a relatively higher level recently, while the share of non-residents in Georgian treasury security holders has increased slightly in February after falling to the more-than-5-year minimum in January 2025;
Consequently, both our short- and long-run equilibrium estimates indicate that the GEL is broadly in line with its macro-implied level;
Elsewhere, annual inflation made up 2.4% in February, in line with our forecasts. However, without one-offs, prices grew by 2.9% annually, already approaching the target", - the report reads.
