Balance of Payments of Georgia

Balance of Payments of Georgia

30 June, 2014

Balance of Payments Statistics is compiled according to the methodology provided by IMF - "Balance of Payments Manual, Fifth edition".

Current account deficit in the first quarter of 2014 amounted to 362.8 million USD (634.8 million GEL, 10.0 percent of the first quarter GDP).

Trade of goods traditionally has been the major contributor in formation of negative current account balance. In the first quarter balance of goods deteriorated by 14.0 percent annually, while improved by 15.9 percent quarterly accounting for 849.7 million USD (1.5 billion GEL). Exports of goods accounted for 982.7 million USD (1.7 billion GEL) increasing by 18.3 percent annually. Import of goods accounted for 1.8 billion USD (3.2 billion GEL) growing by 16.3 percent annually.

The positive services balance partially offsets the negative balance of goods. In the first quarter it decreased by 11.9 percent annually, due to higher growth of imports compared to exports, equaling 226.3 million USD (395.8 million GEL). The export of services equaled to 600.0 million USD (1.0 billion GEL), increasing by 3.1 percent annually. Import of services increased by 14.9 percent annually (mostly due to transportation services), equaling to 373.7 million USD (653.7 million GEL). Among services travel had the largest positive balance (250.9 million USD or 438.8 million GEL) increasing by 2.5 percent annually.

The negative balance of income equaled to 93.9 million USD (164.2 million GEL). Income credit amounted to 230.4 million USD (403.1 million GEL), increasing by 24.7 percent annually. Income debit increased by 22.4 percent annually totaling 324.3 million USD (567.3 million GEL).

The current transfers, the largest positive component of the current account amounted to 354.4 million USD (620.0 million GEL) decreasing by 0.2 percent. Decline was due to the government transfers, while private transfers increased. The inflow of current transfers equaled to 387.0 million USD (677.1 million GEL), while outflow accounted for 32.6 million USD (57.0 million GEL).

Net capital transfers inflow in the first quarter equaled to 12.3 million USD (21.5 million GEL).

Net foreign direct investments, the most significant item for financing the current account deficit, amounted to 229.4 million USD (403.1 million GEL)1 or 6.0 percent of GDP. Out of total foreign direct investments to Georgia 36.6 percent invested in equity capital; 40.6 comprised by reinvested earnings and 22.9 by other capital.

The balance of portfolio investments amounted to -14.1 million USD (-24.8 million GEL). Portfolio investments' assets increased by 31.6 million USD (55.3 million GEL) due to acquisition of GEL denominated bonds issued by EBRD by commercial banks. Meanwhile liabilities increased by 17.5 million USD (30.6 million GEL).

The negative balance of other investments amounted to -106.1 million USD (-185.6 million GEL). Out of that, assets decreased by 95.8 million USD (167.6 million GEL) due to decrease of deposits, loans and trade credits. At the same time, liabilities declined by 201.9 million USD (353.2 million GEL) mainly due to loans. Out of total liabilities in other investments, trade credits decreased by 25.4 million USD (44.4 million GEL); loans by 177.9 million USD (311.2 million GEL) and deposits by 10.4 million USD (18.2 million GEL); while other liabilities increased by 11.8 million USD (20.7 million GEL).

Official reserve assets decreased by 228.8 million USD (400.3 million GEL) due to transactional changes and amounted to 2.6 billion USD (4.5 billion GEL), that covers 3.5 months of imports.

1 FDI data slightly differs from Geostat preliminary statistics. The FDI usually rises after annual survey, when profits of companies are corrected. BOP statistics is adjusted in order to correct this problem, according to the IMF methodology and recommendations of IMF ROSC mission 2012. After completion of annual survey the final FDI data is released by Geostat and BOP FDI record will adjust according to it.