TBC Research: PPI growth accelerated to 10.1% YoY in April
TBC Research published a new report. According to the report, PPI growth accelerated to 10.1% YoY in April 2020, up from 8.7% YoY in March 2020, hinting on the increasing inflationary pressure. Compared to the previous month, PPI rose by 1.5%, with prices growing sharpest for electrical equipment (+15.8% MoM) and metal products (+10.5% MoM).
Real Effective Exchange Rate (REER) was down by 1.1% MoM in April 2020 as it declined by 5.7% YoY. Changes in GEL real exchange rate with the main trade currencies were as follows: GEL/USD depreciated 9.5% YoY, GEL/EUR depreciated 6.5% YoY, GEL/TRY was down 2.8% YoY, while GEL/RUB appreciated 2.4% compared to April 2019.
Exports of goods fell by 27.9% YoY in April 2020 as exports dropped sharply both to the CIS countries (-42.7% YoY) and to EU (-46.6% YoY), but increased to other countries (+30.6% YoY), mostly on the back of higher exports to China (+292.8% YoY), USA (+182.8% YoY), and Switzerland (+86.9% YoY). Sharp decrease was observed for exports of cars (-86.8% YoY), medicaments (-22.3% YoY) and wine (-22.2% YoY), while the exports of ferro-alloys (+55.5% YoY) and gold (+102.6% YoY) increased sharply.
Imports of goods also declined (-38.5% YoY), primarily reflecting falling imports of transport equipment (-69.9%) and capital goods (-55.6% YoY). Lower imports of fuels (-51.4% YoY), industrial supplies (-31.4% YoY), and consumer goods (-30.4% YoY) also significantly contributed to the overall decline. On the other hand, imports of food products increased by 1.6% YoY, explained by continuation of the one-off jump in demand relating to the uncertainties caused by COVID-19.