In the first three quarters of 2015, compared to the indicator of 2014, the external public debt declined by 0.1%, while the corresponding indicator in GEL increased (27.7%), this is attributable to changes in the exchange rate. Hence, the public debt increased by 25.5%. Compared to 2014, the indicator of domestic debt also increased by 16.5%. In this period, the Government of Georgia’s three largest multilateral creditors were: International Development Association (IDA) - 41.7%; International Bank for Reconstruction and Development (IBRD) - 20.9%; and Asian Development Bank (ADB) - 16.4%. The largest bilateral creditors are Germany (38.1%), Japan (22.2%) and Russia (12.3%).

During the first three quarters of 2015, the tax revenues of the state budget increased by 11.2% compared to the corresponding indicator of 2014. In this period, 75.8% of the planned annual tax revenue for state budget has been realized. The structure of state budget tax revenues has remained similar to the corresponding indicator in 2015. The revenues so far are composed as follows: value added tax (VAT) - 46.1%; income tax - 26.2%; profit tax - 15.3%; excise tax - 11.2%; and import tax - 0.9%. Compared with the same period in the previous year, the revenues increased for VAT (6.7%), profit (30.0%), income (15.1%) and excise (5.5%) taxes, while it declined for import tax (-30.2%).

During the first three quarters of 2015, the share of trade turnover between Georgia and EU member countries in Georgia’s total trade turnover is 31.7%, which exceeds (5.6% point) the same indicator in 2014. In this period, the share of export to EU member countries in total export is 28.6% and the share of import from EU member countries in Georgia’s total import is 32.6% . In this period, the export from Georgia to EU countries as well as the import from EU member countries to Georgia increased by 2.1% and 6.8%, respectively.

During the first half of 2015, the real Gross Domestic Product (GDP) of Georgia increased by 2.8% (208.2 mln GEL) compared to the corresponding period in 2014. In this period, the volume of Foreign Direct Investment (FDI), an important source of long-term economic growth, in Georgia amounted to US$530 mln.

The growing number of visitors (tourists, one-day visits, and transit) to Georgia is important for the further development of the country’s tourism sector, as well as for increasing the inflow of foreign currency. In January-August 2015, 3 922 376 international arrivals were registered in Georgia. This indicator exceeds the corresponding indicator for the same period in 2014 by 5.9%. During previous years, July-September has been the busiest period in this regard. A similar tendency is visible in 2015, as 40.5% of international arrivals have been registered in the period of July-August and with September’s statistics still to be added, this figure is likely to mirror the pattern of previous years.

For the period of January-July 2015, the indicator of state budget revenues compliance is 58.0% and the indicator of state budget expenditure compliance is 56.3%. These indicators exceed the corresponding indicators of 2014 by 2.4 % points and 2.6 % points respectively. In this period, the largest source of state budget revenue is still tax revenues (93.5%) and the largest source of tax revenues still remains Value Added Tax (VAT) (45.5%). For the period of January-July 2015, the largest share of total expenditure (35.1%) was devoted to social benefits.

In 2014, the breakdown of Georgian exports by country noticeably differed from 2005 (before Russian embargo). In 2005, Russia was the largest market for Georgian exports and the share of Russia with a share of 17.8%. In 2014, the largest trading partner for Georgia in terms of exports is Azerbaijan (19% of total export), followed by Armenia (10%) and Russia now sits third having reduced to 9.6% (US $274.7 mln). It should be noted that in 2005 Georgia exported to 93 countries, while by 2014 the number of countries had increased to 120. From 2005 to 2014, the annual average growth rate of Georgian export (excluding Russian market) was 18.8% and exports increased by US $1 874.5 mln, in total. The dependence on the Russian market reduced and the market for export has become more diversified which in some ways offsets the impact of external economic factors (embargo) on Georgian exports.

China is the second largest trading partner of Georgia. In 2014, total trade turnover between Georgia and China amounted to 823.4 mln. USD, which is 7.2 % of total turnover. Georgia and China intend to intensify bilateral trade and economic relations through concluding Free Trade Agreement (FTA). PMCG conducted research about the economic feasibility of this agreement. The study uses the “partial-equilibrium” model, which analyzes the possible results in a short-run period. The study shows that FTA can contribute to increase the volume of export from Georgia to China. The volume of import and FDI from China to Georgia will also increase.

In June 2015, compared to the corresponding period in 2014: • The volume of deposits increased (24.8 %; 2 719.5 mln GEL), as well as increased the volume of loans to the national economy (32.6 %; 3 664.7 mln. GEL). Considering the effect of foreign exchange rate, the volume of deposits increased by 7.3 % and the volume of loans to the national economy - by 14.7 %. • Considering the effect of foreign exchange rate, the share of the deposits denominated in foreign currency decreased by 1.0 % point, while the share of the loans denominated in foreign currency decreased by 2.4 % point. In January-June 2015, compared to the corresponding period in 2014, the total profit of commercial banks increased by 26.3 % and equals to 243 mln. GEL.

In June 2015, compared to June 2014, consumer prices increased by 4.5%. In this period, the highest growth of prices recorded on the following categories: • Alcoholic beverages and tobacco (11.4%). Among them increased the prices of vodka (28.5%), domestically produced non- filter cigarette (23.6%) and beer (14.6%). • Furnishings, household equipment and maintenance (8.2%). Among them increased the prices of paper napkins (21.6%), vacuum cleaner (16.8%) and air conditioner (14.6%). • Health care (7.4%). Among them the prices increased on anti-inflammatory medicines (28.2%), vitamins (21.4%), antibiotics (20.3%) and hospital services (5.1%). In this period, the largest reduction of prices recorded on the following categories: • Clothing and footwear (-3.3%). Among them prices declined on child’s jacket (-12.8%), man’s suit (-10.0%), child’s shirt (-5.2%) and girl’s summer shoes (-4.6%). • Transport (-0.6%). Among them prices declined on diesel fuel (-7.5%) and intercity motor transport tariff (-7.1%). In June 2015, the prices of commodities of the subsistence minimum basket increased on avarage by 18.2%, while the subsistence minimum for working age male increased on avarage by 7.9 %.