Mortgages became more expensive

Over 39,000 SMEs in Georgia were successfully supported through 50 projects last year alone. The impact of these projects has been substantial: there was a notable 12.8% increase in turnover among the supported SMEs, which resulted in the creation of almost 37,000 new jobs. Additionally, these businesses generated an extra €200 million in income, showcasing the effectiveness of the initiative in stimulating economic growth.EU Support is Structured Around Three Main Pillars: Access to Finance: €2 million invested (52.9% of the total budget) to support concessionary loans, microfinancing, and financial literacy training for SMEs. Business Development Services: €9 million invested (24.8% of the budget) for direct advice, training, and the development of business clusters, fostering entrepreneurship and innovation. Business Enabling Environment: €7 million invested (22.2% of the budget) to promote regulatory reform, improve policymaking capacities, and encourage public-private dialogue, creating a more favorable business environment. Key Achievements in 2023: 39,072 Georgian SMEs benefitted from various forms of support, including consultancy services, access to finance, and capacity-building programs. 36,973 new jobs were created within EU-supported SMEs. 458 EU-supported SMEs started exporting their products, contributing to a 6.8% increase in overall exports. 17,275 SMEs received loans. 371 SMEs received grants. 4% of supported enterprises are owned or managed by women, advancing gender equity in business. A 26.5% increase in staff among EU-supported SMEs. "The European Union remains committed to the economic growth and competitiveness of Georgia. Under its Economic and Investment Plan, the EU's flagship project has already surpassed its target to support 80,000 SMEs. In 2021-2023, over 100,000 SMEs have benefited from EU support. We are delighted to see these results reflected in the EU4Business Report. In particular, that so many new jobs are being created through EU-supported enterprises and that over 40% are owned or managed by women, advancing gender equity in business and fostering economic and social inclusion. The EU's investment in Georgia's economic development is an investment in the country's future", – commented Nicholas Cendrowicz, Head of Cooperation of the European Union Delegation in Georgia.Through the EU4Business initiative, the European Union has been effectively supporting and empowering small and medium-sized enterprises in Georgia for years. The results speak for themselves. From 2021 to 2023:  Over 100,000 SMEs were supported by the initiative; 77,000 new jobs were created; and an extra €550 million in income was generated. The EU's investment in Georgia's SMEs highlights its commitment to fostering economic growth, innovation, and inclusive development across all of Georgia.For more information see the full report or visit the website.For more information and stories please visit the EU4Georgia website.

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According to the document, in 2023, the median earnings is 29.9% lower than the average monthly earnings.According to the economic activity in 2023, the highest median earnings were observed in thefollowing fields:• Information and communication - 1 960 Gel;• Public administration and defence; compulsory social security - 1 878 Gel;• Construction - 1 810 Gel;• Mining and quarrying - 1 705 Gel;• Financial and insurance activities - 1 696 Gel.According to 2023 data, the median earnings are lower than the average monthly earnings in all sectors.

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Despite the NBG’s regulations, the ratio cannot return to the starting 5% in 2023. As you know, the regulator limited foreign currency lending from GEL 200,000 to non-hedged clients. Then the central bank increased the limit twice by 100,000-100,000. If the borrower has income in GEL and his total liabilities are less than 400,000 GEL, the creditor has the right to issue a loan only in GEL.The 200,000 limit has been in place for years. Turnava's 1st vice-presidency was changed and became available only to hedged clients in foreign currency. This was followed by 300,000 and then 400,000. Accordingly, the annual issuance of foreign currency loans was expected to decrease by $180 million and $150 million.As of 01.09.2024, the equivalent of 23.8 billion GEL in foreign currency has been issued (at current prices, 8.7 billion USD).As of 01.09.2023, the portfolio of foreign currency loans of banks amounted to 21.6 billion GEL.Now the annual (Y.Y) growth of foreign currency lending is 14%, and it falls short of the GEL lending ratio (+22.4% Y.Y) by a whole 8 percentage points.Last year, the rate of annual growth of foreign currency lending was 14.8%, exceeding that of lari (+14.5% Y.Y).

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According to G&T statistics, the price reached 95. The first week of October closed with 94.7.5-year bonds, at 2.75%, were issued in April 2021. At the moment, the Z-spread of the security is 260.6 bps (basis point - %pX100). The z-spread is a variable, discounting the spread over its comparable US Treasury bond.The price of Georgian Railway Eurobond (GRAIL) has also increased. According to G&T Stats, it is trading at 90.7, yielding 6.9%.The railroad's 7-year green bonds were also placed in 2021, covering the $500 million bonds issued in 2012 (10-year maturity, rate -7.75%), with 7-year green Eurobonds (4% yield) before maturity.According to G&T investment bankers, the stability of GEORG is determined by healthy macroeconomic parameters, including a Reduction of debt (domestic and foreign) ratio, a low rate of fiscal deficit, which reduces the country's riskiness and affects investors' sentiments. In addition, GEORG's spread to its comparable US Treasury bond has narrowed significantly to 2.5%.

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According to the NBG's interactive statistics, in August the accounts of companies decreased by 200 million to 10.668 billion GEL. And slightly, there is a decrease of up to 50 million in the current accounts of individuals.Deposits as a whole (current accounts, term and demand deposits) have increased due to the growth in term deposits and exceeded 51 billion.As of 01.09.2024, there are 21.5 billion GEL in the deposit accounts of companies, and the portfolio of deposits of individuals amounts to 29.5 billion GEL, 64% of which are foreign currency accounts.

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Kobakhidze said over GEL 2 billion ($730mln) would be allocated for the development of regions through the Municipal Development Fund while a special programme focused on infrastructure development in settlements across the occupation line separating the Russian-occupied regions from the rest of the country would receive an annual allocation of GEL 20 million ($7.29mln).“Under the rural support programme, a minimum of GEL 400 million ($145.73mln) will be allocated over the next four years. At least GEL 155 million ($56.47mln) will be allocated under the Mountain Fund [...] It is crucial to ensure that the benefits are evenly distributed across the country, reaching different regions. Investments will continue to be made in this regard”, Kobakhidze said.In environmental initiatives, the Government aims to implement modern early warning systems over the next four years and increase the area of protected areas in the country by an additional 100,000 hectares, the Prime Minister said.“Also, 15,000 hectares of forest will be restored and planted. In the last four years, we have increased the pace of reforestation by about five times compared to the previous government. It is not even worth comparing; the amount of forests restored and planted by them was so insignificant in our country”, he said.Kobakhidze also highlighted reduction in air pollution in major cities such as the capital city of Tbilisi and Rustavi, saying air pollution had decreased by 25 percent and 35 percent respectively over the past few years.The Prime Minister said GEL 200 million ($72.87mln) would be allocated for the municipal transport programme over the next four years.“This funding will be used to improve the transport infrastructure and services in municipalities and regions [...] The combined budget for all 68 municipalities totalled around GEL 1.3 billion ($470mln) in 2012, mainly allocated for administrative expenses. However, the budget for 2024 in the regions alone has already reached GEL 3.34 billion ($1.22bln), with a projected figure of GEL 4.59 billion ($1.67bln) for 2028”, he said.“As for Tbilisi, the budget of the capital city was only GEL 657 million ($239.36mln) in 2012. The budget has already exceeded GEL 2 billion ($730mln) in 2024, and the forecast for 2028 is GEL 2.25 billion ($820mln). This amount does not include projects financed from the central budget. Tbilisi City Hall has significant plans for expanding the metropolitan network, rehabilitating avenues, and more. Additional resources beyond the GEL 2.25 billion will be allocated from the central budget for these projects”, Kobakhidze added.The Prime Minister also said the budget of the western city of Kutaisi had been GEL 62 million ($22.59mln) in 2012, before increasing to GEL 195 million ($71.04mln) the following year. Government projections by 2028 put it at GEL 225 million ($81.97mln), he added.Budget for the central-eastern city of Rustavi had been GEL 49 million ($17.85mln) in 2012, he said, adding the figure was expected to rise to GEL 180 million ($65.58mln) by 2025 and reach GEL 210 million ($76.51mln) by 2028. The Black Sea port city of Poti had a budget of GEL 31 million ($11.29mln) in 2012, the PM noted, before adding the number was anticipated to surpass GEL 100 million ($36.43mln) next year and reach about GEL115 million ($41.90mln) by 2028.In public services, the Government head contrasted the number of 12 Public Service Halls across the country with the opening of 109 more venues since the year, with plans to open 12 more between 2024-2025 to complete the project of their expansion.“This will ensure that [Public Service Halls] are available throughout the country, and all municipalities have the necessary infrastructure. Additionally, the Mobile [Public Service Hall] project has been implemented to provide relevant services to even remote villages. The number of services offered in the [venues] has also doubled, which is crucial for our citizens”, Kobakhidze said.He also emphasised the importance of the initiative of systematic registration of land, calling it a “crucial” project and thanking the Ministry of Justice and Minister Rati Bregadze for initiating and implementing it.“Over the recent years, one and a half billion plots of land have been surveyed under this project, and one billion plots have already been registered. Additional funding will be allocated in the coming years to register 500,000 plots to their respective owners”, Kobakhidze said.Addressing the tourism sector, the Prime Minister said the country would attract eight million visitors this year and increase the number to 11 million by 2028.“Tourism is an important sector for our country’s economy, and we take pride in being known for our hospitality. The development of tourism not only has an economic impact, but also a cultural significance for us. We can be proud of the significant growth we have achieved in this area”, Kobakhidze said.“We had 4.7 million visitors in the country in 2012. This figure is expected to reach almost eight million by 2024. The number of visitors is projected to increase to 11 million by 2028. This shows a very positive growth trend in the number of visitors”, he added.He noted income from tourism was projected to increase from $1.4 billion in 2012 to $6.4 billion by 2028, calling it an “impressive” result.“Of course, these incomes will ultimately affect incomes and social status of our population”, Kobakhidze added.The Prime Minister further presented “impressive data” regarding accommodation facilities, including hotels and guest houses.“There were 777 hotels in our country with 23,000 places in 2012. The number of hotels is projected to increase to 2,363 with 108,000 places by 2024. This represents a 4.5-fold increase in the number of places in the hotel sector. The number of hotels is expected to reach 2,680 with 142,700 places by 2028, which is nearly six times the number in 2012”, he said.Kobakhidze revealed plans to support the growth of the industry through private investments of about GEL 1 billion ($360mln) in the hotel sector, as well as allocating over GEL 1 billion for the development of tourist infrastructure, including urban renewal projects.

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To note, August is a passive month, but in July, 2,600 applications were submitted.According to the NBG statistics, from the appeals of August, the most, 61% of the total claims, are related to current account and debit card services. In position II there are claims related to consumer loans.Number of claims by services: 08/2024/

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Official international reserves fell by more than $100 million in September, following a $167 million increase in August.Net purchases with foreign exchange interventions, foreign currency credits received by the government, interest income on reserves and monetary gold revaluation are all factors that increase reserves.In August, with internal government conversions in the banking system, the net foreign exchange sales of the National Bank amounted to 61.6 million US dollars. The National Bank did not intervene through currency auctions. $41 million in net purchases by the NBG on the BMatch platform. If the balance remains positive even in September, we will find out at the end of September, after the NBG publishes the information.In total, BMatch trades and government conversions reduced net foreign assets by approximately $20.6 million. In August, the funds available on government deposits increased by 20.2 million GEL to 1,002 billion GEL.According to interactive statistics, it is only established that in September the financial system lost more than 200 million GEL of liquidity. 400 million with government operations.The value of gold in reserves exceeded $600 million. In relation to foreign exchange reserves, monetary gold, which the ECB added in March this year**, is already over 16%. The share in total reserve assets ($4.6 billion) is up to 13%.Gold has become more expensive globally. According to analysts, increased purchases by central banks make the precious metal more expensive. Also the activation of Asian investors, especially Chinese investors.The rise in gold prices is also typical for the pre-election period. Elections are approaching in various countries, including in the USA. Some investment banks predict the price of gold to $2,700 by 2025.The global trend was also reflected in the Georgian market. The period is also pre-election.

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