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Current account deficit in 2020 amounts to $2 billion US

By Natalia Kochiashvili
Tuesday, March 30
The National Bank of Georgia (NBG) has reported on March 29 that the current account deficit in 2020 was $ 2.0 billion ($ 6.1 billion), or 12.3% of GDP. The current account deficit in the 4th quarter of 2020 was $ 560.2 million ($ 1.8 billion).

In the formation of the current account, the report of trade in goods, services, and income contributes negatively, while the effect of the current transfers is positive. It should be noted that in the last quarter of 2020, the current account deficit decreased by 0.1% year on year, while the ratio to GDP increased from 11.9% to 13.2%.

According to the NBG, the largest component of the current account was still trade-in goods, the negative balance of which decreased by 19.8% year on year to $887.0 million. (GEL 2.9 billion). At the same time, exports of goods fell by 12.4% year on year, while imports fell by 15.7%.

In the 4th quarter of 2020, the net income account was -$224.7 million (-GEL735.0 million). Both positive net wages (by 53.9 %) and negative net investment income (by 20.4 %) decreased.

The traditionally positive component of the current account is current transfers, the credit of which grew by 59.5% year-on-year to $ 645.9 million ($ 2.1 billion) in the fourth quarter of 2020. Private sector net transfers increased by 33.9% during this period. Net transfers from the government sector also increased to $144.7 million (GEL 473.2 million).

Net foreign direct investment stood at $ 120.0 million (GEL 392.6 million) in the 4th quarter or 2.8 % of quarterly GDP.

According to the NBG, Georgia's net international investment position as of December 31, 2020, amounted to $24.8 billion, which is -156.3 %of annual GDP. This figure increased by $ 955.7 million compared to the previous quarter.

As of December 31, 2020, total international assets stood at $ 10.9 billion (GEL35.8 billion), down $125.8 million from the previous quarter, according to the central bank.

According to the agency, total international liabilities amounted to $35.8 billion (GEL117.1 billion), which is $ 830 million more than in the previous quarter. Georgia's total external debt as of the end of 2020 amounted to $20.3 billion (GEL66.5 billion), which is 127.7 % of GDP in 2020.

At the same time, according to the NBG, the state external debt amounted to $9.7 billion (GEL31.9 billion), which is 61.3 % of GDP.

In the fourth quarter of 2020, the external debt of the National Bank of Georgia increased by $125.4 million.