31.Jul .2022 11:54

TBC Capital’s Update on Trade and Credit Growth


Now to put these developments into context, let me give you an overview by the Chief Economist of another Georgian major investment bank - TBC Capital.

According to Otar Nadaraia, June exports detailed data came in with no major surprises, though the dynamics could be somewhat weaker than expected. In particular, the terms of trade worsened a bit, exports growth was solely on the back of higher prices and re-exports was the major driver. At the same time, investment goods continue to have a high share in imports, especially after adjusting for the impact of the higher oil prices, indicating the strong sentiments and bullish growth outlook.

TBC Capital analysis shows that the credit growth in June was also strong, and despite high interest rate differential, the housing finance was solely in GEL. The Chief Economist also notes that the non mortgage credit has started to cool down, in line with TBC Capital’s expectations. TBC Capital believes appreciation pressures should hold, unless the USD weakens, being absorbed by the central bank interventions.