National Bank of Georgia Releases January 2024 Monthly Economic Review

The National Bank of Georgia has published its January 2024 Monthly Review, offering a comprehensive analysis of the latest macroeconomic trends and developments in the country's banking and financial sectors.

This publication aims to provide the public with a succinct macroeconomic overview based on the most recent data available.

Inflation Dynamics

• In December, the annual inflation rate stood at 0.4%, with a slight increase of 0.1% from November.
• The low inflation rate is attributed to a decrease in domestic inflation, a result of stringent monetary policies.
• A continued decline in global food prices significantly impacts the inflation rate.
• The Georgian Lari's (GEL) strong real effective exchange rate contributes to keeping imported inflation low.
• Inflation for locally produced goods dropped to 3.6% in December.

Banking Sector Insights

• Excluding exchange rate effects, loan growth in November showed a 16.3% annual increase.
• Deposit dollarization in November 2023 rose marginally by 0.3 percentage points from the previous month, reaching 50.8%.
• The dollarization of the total credit portfolio in November edged up by 0.2 percentage points to 45.5% from the preceding month.

Foreign Sector Overview

• Imports: In November, there was a 7.6% year-on-year decline in goods imports, primarily due to reduced imports of intermediate goods, while consumer and investment goods imports saw modest increases.
• Exports: November witnessed a 1.8% year-on-year decrease in registered goods exports, largely due to a drop in intermediate goods exports. However, consumer goods exports showed significant growth.
• International Reserves: Official international reserves experienced a slight increase in November compared to the previous month, amounting to USD 5.1 billion.

This report from the National Bank of Georgia provides valuable insights into the country's economic health and trajectory, particularly in the banking and foreign sectors.