TBC Capital published Weekly Update From The Chief Economist. The document reads, that increased service exports and the seasonality drove Georgia’s positive current account balance in the third quarter of 2023. Adding that, IT exports maintained a high share alongside with traditional tourism and transportation sectors and November GDP growth was also decent, standing at 5.9%.
According to the report, slight GEL appreciation despite some contradictory factors once again enables TBC Capital to conclude that net currency inflows were strong in December as well:
• Low overall inflation persists, while domestic and service measures remain close to target;
• Credit activity continues improving both in nominal and real terms, with the latter climbing to 16.1% YoY.
• Credit and deposit currency composition are not GEL-supportive probably resulted from still persistent seasonal depreciation expectations, namely:
• On the contrary, holding of Georgian treasury securities by non-residents remained flat in the last three months after declining previously;
• As for the NBG, in contrast with 77.5 USD mln monthly average sales in September-October, the central bank intervened in the market by selling only a very modest 14.7 USD million in November;
• Deposit currency composition estimate points to a higher growth in FC in December than in the GEL, being often a GEL weakening driver;
• While December credit data is not yet available, November MoM growth was stronger in LC, again often being GEL-negative as well;
• On the contrary, holding of Georgian treasury securities by non-residents remained flat in the last three months after declining previously;
• As for the NBG, in contrast with 77.5 USD mln monthly average sales in September-October, the central bank intervened in the market by selling only a very modest 14.7 USD million in November;
• Low overall inflation persists, while domestic and service measures remain close to target;
• Credit activity continues improving both in nominal and real terms, with the latter climbing to 16.1% YoY.
