Economic growth remains robust

Economic activity eased slightly but still remained very strong in 1Q 2024, with real GDP increasing by 7.8%, following 7.5% growth in 2023. External sector activity in 1Q 2024 continued to be negatively affected by lower international commodity prices, with domestic exports particularly hard hit despite a mild recovery in ferro-alloy exports. Exports and imports denominated in US dollars decreased by 9.3% and 5.3% YoY in 1Q 2024, respectively.

On a more positive note, tourism revenues excluding Russia, Ukraine and Belarus increased by 30.8% YoY in 1Q 2024, while overall tourism including migration impact grew by 1.5%, given that migrants are gradually being counted as residents by the NBG and hence excluded from the tourism sector. Meanwhile, remittances fell 20.7%1 year-on-year in 1Q 2024, driven by a high base effect in money transfers from Russia. Total FDI in 2023 decreased by 24.0% year-on-year, due to very large liability repayments, however, reinvested earnings and equity investments reached an all time high of USD 2.5 billion. Combined with a high contribution from investment in GDP growth this points to continued positive momentum in both actual and potential economic output.

Fiscal consolidation continues in 1Q

The government remains focused on fiscal consolidation by reducing the budget deficit relative to GDP. A sizable surplus was recorded in 1Q 2024, with the budget balance2 standing at 1.3% of GDP, while the government targets 2.5% deficit for the full year, compared to 2.8% in 2023 and 3.0% in 2022.

Credit growth remains strong

Following 17.0% growth in 2023, bank credit growth accelerated slightly to 17.2% YoY as of March 2024 at constant exchange rates3. At the same time, as low and stable inflation persisted, YoY growth in real credit also remained high at 16.6%. Credit growth remains stronger for legal entities, increasing by 20.6% YoY, while lending to individuals was up by 14.4% in 1Q 2024. The dedollarization of bank lending continues, wth the share of FX loans slightly decreasing to 45.0% at the end of 1Q 2024 (down from 45.2% YTD).

Low inflation enables monetary policy easing

Despite substantial easing and volatile market sentiment, the GEL, with support from still high net currency inflows, remained almost unchanged against the USD during 1Q 2024, standing at 2.69 at the end of March. Notably, leveraging strong inflows, the NBG switched back to reserve accumulation, purchasing USD 88 million in the first three months of 2024.

CPI inflation stabilised well below the NBG’s target of 3%, standing at 0.5% YoY in March. However, domestic and service inflation measures showed gradual acceleration. Nevertheless, low overall inflation led the NBG to deliver two rate cuts in the first quarter, reducing the monetary policy rate (MPR) to 8.25%.


Continued strong economic performance

Uzbekistan also continues to show strong economic activity with 6.2%4 real GDP growth in 1Q 2024. However, the annual growth rates of external trade decreased compared to the 4Q 2023 and amounted to 10.5%5 for exports of goods and 1.8% for imports, with the latter being affected by high base effect related to a one-off. Retail credit growth remains robust at 40%6 YoY at end March, with mortgage credit expanding by 24% and non-mortgage credit by 53%.

Annual inflation decreased slightly from 8.8% in December to 8.0%6 in March, with a more pronounced deceleration evident when compared to 11.7% in March 2023. The CBU kept its monetary policy rate unchanged at 14.0% in the first quarter. The UZS stood at 12,6206 relative to the USD at the end of March 2024, depreciating by 2.3% in 1Q 2024, while the REER (real effective exchange rate) remained broadly stable.

Upgrading Georgian economic growth forecast

Given the strong start to 2024, we recently upgraded our forecast for real GDP growth in Georgia to 6.4% (from 5.6%), while our projection for Uzbekistan stands at 5.6%.

More information on the Georgian economy and financial sector can be found at


 1 Remittances from Russia are adjusted for double counting with tourism inflows and other similar effects, based on TBC Capital estimates.

 2 Per IMF program definition.

 3 Based on data published by NBG and FX-adjusted by TBC, based on Dec-2023 end of period exchange rate.

 4 Based on data published by CBU.

 5 Based on data published by Uzstat.



Population : 3.7 million

GDP (2023) : US$30.5 billion

GDP per capita1 (2023): US$22.6k

Average real GDP growth (2013–2023) : 5.0%


Currency: Lari (GEL)

Exchange rates (31 March 2024): USD/GEL 2.70; EUR/GEL 2.91

Recent achievements

#1 globally in Open Budget Index2

#1 in the Rule of Law Index among Eastern Europe and Central Asia3

#7 globally on Ease of Doing Business4

#2 on Starting a Business4

#7 in Protecting Minority Investors4

#12 in Enforcing Contracts4

#25 in Economic Freedom Index5

#1 in Corruption Perception Index in Eastern Europe and Central Asia6



Sources: GeoStat; NBG; IMF,  Rating Agencies

at PPP, current prices, TBC Capital estimates

IBP, Open Budget Survey 2021

#48 globally; World Judiciary Project, Rule of Law Index 2023

World Bank, Doing Business Report 2020

Fraser Institute, Economic Freedom of the World 2023 Annual Report

#49 in the world; Transparency International, Corruption Perception Index 2023