Finance

In August, the USA is leading in the volume of remittances

According to the document, in August 2024, the volume of money transfers from abroad constituted 290.6 million USD (784.4 million GEL), which is 0.3% (0.9 million USD) more than the amount in August 2023.As of the report, 96.2% percent of the total money transfers from abroad came from 24 largest partner countries, with the volume of transfers from these countries each exceeding 1 million USD in August 2024. In August 2023 the share of these 24 countries constituted 96.1% percent of the total volume of money transfers.In August 2024, 33.1 million USD (or 89.4 million GEL) was transferred from Georgia, which is 12.1% more as compared to 29.5 million USD in August 2023.

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Only One Out Of The Three Georgian Companies Listed On The LSE Has A N...

Bank of Georgia Group (BGEO LN) shares closed at GBP 40.85/share (+0.74% w/w and +2.00% m/m). More than 175k shares traded in the range of GBP 40.05 - 42.00/share. Average daily traded volume was 48k in the last 4 weeks. The volume of BGEO shares traded was at 0.38% of its capitalization.Bank of Georgia Group (BGEO LN) shares closed at GBP 40.85/share (+0.74% w/w and +2.00% m/m). More than 175k shares traded in the range of GBP 40.05 - 42.00/share. Average daily traded volume was 48k in the last 4 weeks. The volume of BGEO shares traded was at 0.38% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 10.10/share (+4.45% w/w and +6.09% m/m). More than 490k shares traded in the range of GBP 9.61 - 10.20/share. Average daily traded volume was 118k in the last 4 weeks. The volume of CGEO shares traded was at 1.15% of its capitalization.

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NBG Keeps Its Monetary Policy Rate at 8%

Inflation in Georgia remains below the target of 3 percent. Headline inflation recorded 1.0 percent in August 2024, while core inflation stood at 0.9 percent. The gradual decrease in inflation of domestically produced goods and services largely contributes to maintaining inflation below the target. This reflects the normalization of long-term inflation expectations in the economy, driven by consistent monetary policy adjustments during both tightening and easing periods. Although economic growth has exceeded expectations, demand-side pressures on inflation remain relatively weak. According to the NBG’s assessment, this indicates an acceleration in potential growth. Other things being equal, the current macroeconomic forecast suggests that low inflation will persist in 2024 and stabilize around the target level in the medium term.Despite these positive developments, it is important to note the high level of global economic uncertainty, which could potentially generate inflationary pressures. Against the backdrop of the current acute geopolitical tensions, disruptions in supply chains and international shipping still persist. In this environment, expected trends in oil and food prices on international markets are highly uncertain, posing risks of rising imported inflation. At the same time, strong economic growth, along with rising potential, is further stimulated by elevated credit activity, primarily driven by domestic demand, which also gives rise to inflationary risks.As a result of the analysis of the current domestic and external conditions, the NBG has maintained the monetary policy rate unchanged at 8.0 percent. Such a cautious approach to the normalization of monetary policy is important to keep inflation close to its target in the medium term. If inflationary risks do not materialize and the severity of inflationary pressures diminishes, the NBG will continue to vigilantly reduce the policy rate to its neutral level. Conversely, if factors driving inflation expectations upward reemerge, it may be necessary to tighten the monetary policy stance or maintain the current stance longer.The National Bank of Georgia continuously monitors ongoing economic processes and financial markets and will use all available tools to ensure price stability.The next meeting of the Monetary Policy Committee will be held on October 23, 2024.

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World Bank: Georgia to rank second in world for 5-year GDP per capita...

The report predicts Georgia will maintain its leading positions for three consecutive years by improving its well-being indicators compared to the pre-pandemic period.Specifically, the country’s GDP per capita is projected to grow by 30.3 percent over a five-year period this year, and 37 percent in 2025.Looking ahead to 2026, the report anticipates a 44 percent increase in the real GDP per capita over a seven-year period, again placing the country in the second position globally and first in the Eastern Hemisphere.The World Bank projected the Georgian economy to grow 5.2 percent this year in its June edition of the Global Economic Prospects report.

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The microfinance sector employs about 4,700 people

At the moment, MFO "Crystal" employs about 1,000 persons, while 750 are employed in MFO "Rico", which is represented by the largest network of 61 service centers throughout the country. The second is "Crystal", with 47 service departments.With more than 45 branches, there are 2 more banks on the market, MFO "Creditservice+" and MFO Leader Credit.More than half of the credit investments come from 2 big market players. "Rico" has a portfolio of up to 550 million GEL, "Crystal" has a portfolio of up to 500 million GEL, which is traded in the banking market.Staff maintenance costs in the sector are 67.7 million. Of this, 10.5 million are expenses of "Rico". The cost of "Crystal" in half a year is up to GEDL18.3 million.In the microfinance sector, which is represented by 34 municipalities, 4,675 are employed.

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The Volume of Bad Loans Amount to 2.2% In MFO

According to MFOs statistics, the sector owns bad loans of 42 million GEL in the loan portfolio of 1,899 billion GEL. In total, 910,000 loans have been issued to the sector (34 MFOs).Gold and other precious metals that are accepted as collateral are unsecured. To repay loans from borrowers, initially recorded at cost, which equal to the net book value of the covered loan at the date of acquisition.It is then measured at fair value, which is determined as expected to be liquidated cost-reduced by Bloomberg's suggested price. fair value changes after initial recognition and resulting from the disposal of gold bars.The gain/loss is recorded in other income. Because precious metals and others selling owned collateral to the main source of income (company activities) are not related.Almost half of the 1.9 billion portfolio – GEL 870 million, is issued against the security of gold and other precious metals. GEL 220 million loans are secured by real estate.Financial assets are partially or completely written off only when the company will stop performing the recovery. Pawn loans are written off when the loan will be overdue for more than 60-90 days.Bad mortgage loans are written off when foreclosure procedures are completed or cash flows.Further acceptance is no longer expected from the borrower or the subject of the security, which may take 2 years.

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Mortgages became more expensive

For legal entities, mortgages in foreign currency also became more expensive. In July, it increased by 0.2% to 11.8%.In the spring, if the downward trend of rates was maintained since the beginning of the year, in July-August the increase is already up to 5 percent.Mortgage lending decreased by 1.3% in July, year-on-year growth is maintained, up to 11.3% y-o-y.In general, lending has accelerated to 18.3% in annual terms, although the contribution of mortgages is 2.13% (01.08.2023 - 2.44%)According to the NBG’s review, the increase in loan growth rate was mainly caused by the acceleration of lending in national currency. It increased to 22.4% in GEL and contributed 12.2% to the annual growth.

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NBG’s share in foreign exchange trading is at a historical minimum

According to the NBG statistics, at the same time, the NBG removed more than 300 million GEL from the market in May, with 2 auctions (16/05, 28/05), and in June, up to 172 million GEL, with a foreign exchange intervention of $60 million. The central bank did not apply for intervention in July. Net sales on BMatch totaled $9.1 million.In 07/2024, buying and selling activities in the foreign exchange market are almost entirely spot deals (97.5%).The share of the National Bank in the total trade is 0.1%.NBG’s share in total foreign exchange trade by month:

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Shares of Georgian companies listed on the LSE fell sharply

According to Galt & Taggart's review of the week of September 2-6, the share prices of all three Georgian companies listed on the London Stock Exchange were sharply devalued compared to the previous week. Bank of Georgia and TBC lost the most.TBC Bank Group (TBCG LN) closed the week at GBP 28.40/share (- 9.84% w/w and +2.71% m/m). More than 232k shares changed hands in the range of GBP 28.00 - 31.60/share. Average daily traded volume was 51k in the last 4 weeks. The volume of TBCG shares traded was at 0.42% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 9.67/share (-5.38% w/w and -0.92% m/m). More than 374k shares traded in the range of GBP 9.66 - 10.32/share. Average daily traded volume was 113k in the last 4 weeks. The volume of CGEO shares traded was at 0.88% of its capitalization.

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Basisbank Named Best Private Bank Georgia 2024 at the Global Banking &...

At the awards, Basisbank's Unique range of banking products and services, designed specifically for high-income clients, was praised for meeting international standards. The bank's innovative offerings, including exclusive banking products and personalized financial solutions, not only attract premium customers but also contribute significantly to its steady growth and solid reputation."Basisbank is making significant strides in the banking industry by offering a personal and sophisticated banking experience to its customers," said Wanda Rich, Editor of Global Banking & Finance Review. "The bank prioritizes anticipating clients' needs and continually develops close, personalized relationships with each one. This commitment to excellence has earned Basisbank the title of Best Private Bank in Georgia for 2024.”Basisbank expressed immense pride in receiving the award, underscoring its commitment to offering clients tailored products and services that meet their unique needs. The bank attributes this achievement to the dedication and professionalism of its team. "We are particularly proud to receive the award for Best Personal Banking Service," Lela Gvantseladze, Head of Basisbank Unique Banking, commented. "This recognition confirms that we provide our clients with banking products and services customized to their individual needs and lifestyles. Our goal is to offer practical and efficient solutions that save our clients' time while fostering long-term loyalty and cooperation."The Global Banking & Finance Review awards, known for their unbiased editorial policy, recognize outstanding companies worldwide for their achievements, innovations, and strategic milestones in the banking and finance sectors. This international recognition further enhances Basisbank's standing in the industry.

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Average Monthly Nominal Earnings Up 11%Y-O-Y

1726492958 • Economics

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The microfinance sector employs about 4,700 people

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Shares of Georgian companies listed on the LSE fell sharply

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Rating of billionaire banks - concentration has increased

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Basisbank Named Best Private Bank Georgia 2024 at the Global Banking &...

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Politics

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European Union & USAID are United in Support for the People of Georgia

EU Delegation and USAID officials visited a range of initiatives devoted to education, social and civic issues, and economic growth and job creation. A key highlight included meeting with civil society representatives and local civic leaders. It underscored the critical role of grassroots involvement in delivering assistance, particularly to the most vulnerable Georgians, and at a moment when some have been victims of increasing acts of harassment in an increasingly difficult operational environment. This engagement not only showcased the tangible outcomes of EU and USAID investments but also provided a valuable opportunity to connect directly with programme participants, hear their stories, and better understand the lasting impact of development programmes.The visit also highlighted the strategic importance of Georgia's regions, for EU and USAID development efforts. By focusing on projects that promote social inclusion, education, innovation, environmental sustainability, the initiative demonstrates how Georgia's partners are helping to build stronger, more resilient communities in Georgia's regions."The EU remains deeply committed to supporting the people of Georgia, where our partnerships with local communities in all the regions of Georgia are making a real difference," said Nicholas Cendrowicz, Head of Cooperation at the EU Delegation to Georgia. "This joint visit to Kakheti offers a first-hand view of the outcomes of our work, ensuring that the projects we support are both sustainable and impactful for Georgian citizens in these regions. We are proud to stand with our partners at USAID as we contribute together to the growth and prosperity of the people of Georgia."I was pleased to join our EU colleagues in visiting local partners across Kakheti – business owners, youth, civic leaders, and citizens – seeing firsthand how USAID and EU programmes are helping them make a positive impact in their communities," said USAID/Georgia Mission Director John A. Pennell. "USAID, on behalf of the American people, has partnered with Georgia and its people since 1992, supporting this country to become more secure, democratic, and prosperous as it moves closer to Europe. USAID is dedicated to continuing to work hand-in-hand with Georgians to build a stable democracy where all citizens have a voice in how their society is governed, and a stronger economy that delivers prosperity and opportunity to workers, families, and communities. This visit follows a first round of visits in Shida Kartli and Imereti regions in July. Both visits demonstrated the significant impact of collaborative efforts by the EU and USAID. This joint visit serves as a powerful reminder of the shared values and goals that underpin the EU's and USAID's efforts in Georgia. It is a compelling demonstration of how coordinated, long-term support can drive meaningful change in the lives of Georgia's citizens, ensuring inclusive and sustainable development across the country.

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Gov't To Establish State-Funded Grant Program For Georgian NGOs - PM

Kobakhidze noted that the registration process for NGOs under the “Transparency of Foreign Influence” law recently concluded. “Over 450 non-governmental organizations, many of which receive foreign funding, have applied to the Ministry of Justice. I want to thank these organizations for their civic responsibility. This proves that receiving foreign funding does not necessarily indicate negative foreign influence,” he remarked.He also pointed out that the government has decided to create a grant program to support non-governmental organizations.The necessary institutional and financial frameworks for the grant fund will be established over the next two months, with the first grants being distributed in January 2025.

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Georgia, Azerbaijan, Hungary, and Romania sign agreement on Black Sea...

This cable will connect Georgia and Romania, with the project expected to be operational by 2030. The joint venture, which will be headquartered in Romania, was formalized by the transmission system operators of the four countries, with the agreement signed by Giorgi Gigineishvili, the General Director of JSC Georgian State Electric System. Georgian Minister of Economy Levan Davitashvili participated in the event.The project aims to facilitate the supply of electricity from Romania to Hungary and subsequently to Western European countries, strengthening energy ties between these nations and contributing to the development of green energy infrastructure in the region.

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US pauses USD 95 MLN assistance to Georgian Gov’t over transparency la...

“The Georgian Government's anti-democratic actions and false statements are incompatible with membership norms in the EU and NATO”, the US Secretary of State Antony Blinken said in a statement on the decision.Blinken noted Washington would continue assistance that would “benefit the people of Georgia”.“While we are pausing our assistance to the Government of Georgia due to those actions, the United States will continue assistance to programs and activities that benefit the people of Georgia by strengthening democracy, rule of law, independent media, and economic development”, he said.The law, which requires registration of non-commercial legal entities and media outlets in the country as “pursuing the interests of a foreign power” if they derive more than 20 percent of their funding from abroad, comes into effect in Georgia starting today.It does not impose restrictions on operations of organisations registered under its provisions but requires the organisations to register in a public database under the status and declare their annual revenue.

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Georgian law on transparency of foreign influence comes into effect st...

The law, as stated in the country’s Legislative Herald, does not impose restrictions on operations of organisations registered under its provisions. It requires the organisations to register in a public database under the status and declare their annual revenue.The country’s Ministry of Justice is authorised to carry out research and monitoring to identify the organisations, with the possibility of monitoring every six months.Parliament Speaker Shalva Papuashvili formally signed the law in June after the legislative body overrode a veto of the country’s President Salome Zourabichvili on the bill, placed on the legislative initiative after it was approved by the Parliament in its third reading.