National Bank reviews inflation, banking, foreign sectors in December macroeconomic analysis

The National Bank of Georgia on Monday published an analysis of the current situation and macroeconomic parameters in the country's banking and financial sectors, reviewing inflation, deposits and loans with dollarisation share in the portfolio and foreign sector.

Inflation

The NBG said annual inflation in December amounted to 0.4 percent, and prices increased by 0.1 percent compared to November.

It said the low inflation was caused by the downward trend of local inflation, which was the result of a “strict” monetary policy.

Real effective exchange rate of the Georgian national currency, the lari, maintains a strong position. This, together with the gradual reduction of external shocks, helps to keep the imported inflation at a low level. Inflation of locally produced products decreased to 3.6 percent in December”, the Bank said.

Data in the banking sector:

• In November, excluding the effect of the exchange rate, loans increased by 16.3 percent annually
• Based on the growth rates of foreign and national currency deposits, dollarisation of deposits in November 2023 increased by 0.3 percentage points compared to the previous month and amounted to 50.8 percent
• In November, dollarisation of the total credit portfolio increased by 0.2 percentage points from the previous month and equalled 45.5 percent 

Foreign sector:

• In November, the import of goods decreased by 7.6 percent year-on-year. 
• Registered exports of goods decreased by 1.8% year-on-year in the same month. 
• There was no significant change in official international reserves in November, which slightly increased compared to the previous month and amounted to $5.1 billion 

The NBG explained the decrease in the imports was mainly caused by the decrease in the import of intermediate goods, while the decrease in the exports was largely caused by the decrease in the export of intermediate goods.