BAKU, Azerbaijan, Dec. 28
By Maryana Akhmedova – Trend:
According to the forecast from Galt & Taggart, inflation in Georgia will decrease from March 2022, with annual inflation at 4.1 percent in 2022, while the National Bank of Georgia (NBG) projects it at 7.2 percent, Trend reports via the macroeconomic review from the Galt $ Taggart.
Inflation accelerated markedly in 2021, and the NBG solved this problem by monetary policy tightening, the report said.
“The regulator raised the key rate by another 50 basis points to 10.5 percent and in total by 250 basis points from the beginning of 2021,” Galt & Taggart said.
“The recent rate hike was appointed by the NBG to contain inflation expectations in the medium term, while it still considers inflation as temporary and due to factors independent of monetary policy (according to the NBG, these exogenous factors contributed to the growth of overall inflation by 9 percentage points),” Galt & Taggart noted.
Global inflation in food and energy, the increase in utility tariffs, the gradual depreciation of the Georgian lari and the acceleration of local demand were the main factors of inflation in Georgia, which lead to 12.5-percent inflation in November 2021, the report said.
Core inflation has decreased slightly over the past 3 months, reaching 6.1 percent in November 2021, which indicates the temporary nature of the price increase with limited secondary effects, the report noted.
Various inflation risks, such as depreciation of Georgian lari, continued growth in energy prices and wage growth seem weaker now, the report said.
Meanwhile, the NBG intends to keep a tight monetary policy rate, until inflation declines, which the NBG also expects in spring 2022, Galt & Taggrt noted.
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