Georgian GDP expansion to enhance the last year’s decline
23 September, 2010
Georgian GDP expansion to enhance the last year’s decline


Georgian economy will grow this year, the research of BG Capital, one of the leading Georgian investment banks, reported on September 16, 2010.

The research makes a detailed analysis of Georgian economy and assures that the 3.9% contraction of Georgian GDP last year [one of the tiniest among the non-energy exporting countries of Eastern Europe] will be replaced by approximately 4.9% of growth by the end of this year that will fully offset the past year’s slump. Georgian economy has

improved in the first quarter of this year and real GDP grew by 4.5% that creates a ground for the above presumption. BG Capital analysts believe that the long-term annual real GDP growth rate will reach 5% supported by heavy investments into infrastructure and service sector.
The country traditionally relies on Foreign Direct Investments (FDIs) and debt capital inflows to offset its inherent current account deficit. The deficit halved   in 2009 and accounted for 11.7% of GDP on the back of weaker domestic demand and depreciation of Georgian national currency Lari.

According to BG Capital prognosis, this year’s upbeat recovery in export will squeeze it further to 10.8%.The capital and financial account’s projected surplus will likely fall short of current account deficit by USD 230 million [the similar balance was by USD 25 million more past year] as FDIs inflow remains weak and banks pay down external debt.

Georgia’s external financing gap should be fully eliminated next year as global capital markets improve whereas this year’s financing shortfall will be safely covered by IFC funds.
The Report predicts negligible foreign exchange shock-related risks next year. The Lari is down by 23% versus US dollar since August of 2008 when the country was affected by the short-lived war. And the current Lari vs. US Dollar exchange rate looks to be an adequate reflection on the country’s external financing balance. BG Capital does not expect any foreign exchange rate shocks and see the Lari only slipping marginally to GEL 1.9 against USD 1 by end of 2010 on the back of seasonal pick-up in import. The national currency rate should then move back towards the currently fixed GEL 1.85 vs. USD 1 by end of 2011as foreign capital inflows intensify.
The budget deficit’s hike to 9.2% of GDP in 2009 spurred the government to tighten its fiscal belt and target a gap at below 5% in 2011.Current progress on fiscal consolidation is encouraging and the government already improved its 2010 deficit target to 6.3% from the initial 7.1% on higher-than-anticipated tax revenues.

Central government debt stood at a comfortable 35% of GDP as of end of the first half of the year of 2010; however the figure is poised to peak at near 38% of GDP by the end of the year before reversing in the coming years as BG Capital analysts predict.
Lending grows on better funding and the loan quality is improved. Although still underpenetrated, the banking sector goes ahead to strengthen with customer deposits hovering at all-time high, the Report assures. Meantime the Non-Paid-Loans (NPL) have come down to below 16% from a 19% peak in mid-2009.The largest banks remain well-capitalized,  with the bulk of delinquent loans already sufficiently provisioned. The banking sector’s improved health helped unlock lending which grew by 5% by end-July of 2010 [without influence of the foreign exchange rate]. The BG Capital report approved the recent inflation-targeting rate hikes proposed by National Bank of Georgia (NBG) and will not impede recovery in lending. BG Capital analysts presume that the aggregate loan book will expand by 13% [by 23% in Lari] in 2010 on a foreign-exchange rate adjusted basis. And the growth rate will be maintained next year.

Other Stories
Inovative and reliable online shop in Georgia -
Status of Georgia as a business and tourism interesting country is growing from year to year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equiavlent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30