TBC Capital predicts that the Georgian economy will rebound more than 10 percent for the full year 2021, Trend reports via the TBC Capital’s report.

“The Geostat also published data for the second-quarter GDP, with year-on-year growth amounting to 29.9 percent. Importantly, the recent version is the revision of the initially estimated monthly growth data, leaving our earlier projection of more than 10 percent rebound for the full year 2021 in place”, TBC Capital reports.

According to the report, August exports cooled more than expected with a 14.7 percent year-on-year increase in USD terms, besides the base effect, probably on the back of the softening pent-up demand worldwide, though traditional monthly volatility has to be also taken into account.

“Contrary to exports, imports continued strong performance relative to the previous months indicating a rebound in the domestic demand, likely further fueled by the dissavings especially in foreign currency, having a positive impact on the Georgian Lari (GEL). The domestic demand was also supported by the higher remittance inflows being up by 11.2 percent year-on-year”, the report reads.

TBC Capital also focuses on the National Bank of Georgia monetary policy committee decision, which was kept at 10 percent.

“While inflation is very high, we agree on the next year’s moderation outlook, assuming stability of the local currency and commodity prices. Among others, this argument is likely also supported by the recently released wage data. Though the year-on-year salary growth in 2Q2021 was strong at 15.5 percent, an estimated unit labor costs actually went down on the back of a much stronger output and productivity increase”, the report reads.

Source: Trend News Agency