Galt & Taggart has published its updated Weekly Market Watch which covers the top economic issues in the country during the last week. More specifically, the publiaction focuses on banks' lending and deposit portfolio, goods trade deficit, FX purchase of the Central Bank and Producer Price Index.
Bank lending accelerated in Jul-23
In Jul-23, the banking sector loan portfolio showed a further acceleration, up by 14.5% y/y (+0.4% m/m), excluding FX effect, after a 13.5% y/y growth in previous month. In unadjusted terms, loan portfolio increased by 13.6% y/y (+1.0% m/m), reaching GEL 47.8bn (US$ 18.1bn), after growing 8.4% y/y in June. By sector, corporate loans experienced a more pronounced acceleration, with a 14.7% y/y growth in July (+12.0% y/y in June, exc. FX effect) and retail loans slightly decelerated to 14.2% y/y (+14.7% y/y in June). Notably, the mortgages growth also slowed to 11.3% y/y in July (+11.8% y/y in June).
Bank deposits increased by 25.3% y/y (+1.6% m/m, exc. FX effect) to GEL 47.8bn (US$ 18.1bn) in Jul-23, after a 29.2% y/y growth in June. In terms of currency breakdown, GEL deposits growth came in at 41.2% y/y (+43.1% y/y in previous month) and FX deposits growth (exc. FX effect) slowed to 13.3% y/y (+19.1% y/y in previous month). As a result, the level of deposit dollarization stood at 50.6% (-6.27ppts y/y and -0.13ppts m/m) in Jul-23.
Goods trade deficit increased by 2.8% y/y in Jul-23
In Jul-23, goods exports reduced by 0.7% y/y to US$ 529.6mn, after a 22.7% y/y growth in previous month, explained mainly by last year’s high base effect. Goods imports growth slowed to 1.2% to US$ 1.2bn in July, after growing by 11.1% y/y in June. Consequently, the trade deficit increased by 2.8% y/y to US$ 657.0mn, after a 3.2% y/y growth in June.
The top 5 exported commodities were cars (+83.3% y/y), copper (-55.3% y/y), electricity (+139.9% y/y), wine (+13.9% y/y) and fruits (-13.4% y/y) in Jul-23. A 9.5% of exports were directed to the EU (-3.8% y/y), 65.4% to the CIS (+24.1% y/y) and 25.1% to other countries (-34.2% y/y).
The top 5 imports were cars (+25.4% y/y), petroleum (-21.0% y/y), pharmaceuticals (+11.8% y/y), telephones (+43.2% y/y) and copper (-73.8% y/y) in Jul-23.
Overall, in 7M23, trade deficit increased by 21.3% y/y to US$ 4.9bn, as exports increased by 15.9% y/y to US$ 3.6bn, while imports were up by 19.0% y/y to US$ 8.5bn.
NBG purchased US$ 278.5mn in Jul-23
In Jul-23, NBG purchased US$ 278.5mn through the BMatch platform. Overall, in 7M23, NBG’s net FX purchases reached US$ 1.34bn.
Producer price index fell by 2.8% y/y in Jul-23
Annual PPI for industrial goods fell by 2.8% in Jul-23, after decreasing by 6.0% in previous month, according to Geostat. This decline was mainly driven by price reduction in manufacturing sector (-3.4% y/y).
