The National Bank of Georgia decided to keep the refinancing rate unchanged at 11% following a meeting of its monetary policy committee on Wednesday.
The country’s financial institution stressed that inflationary risks remained a “current global challenge”, noting that high prices in international markets were “seriously affecting” most countries in the world, including Georgia.
The sanctions imposed on Russia and the additional supply disruption resulting from the Russian-Ukrainian war have significantly increased international prices for food, energy and other commodities,” the bank said. said.
He also noted that the inflation rate in Georgia remained high, standing at 11.5% in July and predicted that this figure would tend to decline in the current year and the following years, adding that it should gradually approach the target level from the second half of 2023.
A faster decline in inflation is hampered by growing aggregate demand, to which high consumption contributes significantly […] In a context of consecutive shocks, inflation has long deviated from the target level, which further amplifies inflationary risks,” the central bank concluded.
The NBG cited the “record level” of remittances, the recovery of tourism and strong credit activity among the reasons for the rapid growth of economic activity in the country.
Furthermore, he said credit activity was still high in the current year despite tight monetary policy, citing excessive growth in consumer loans and foreign currency loans as the reasons for the latter. The NBG has predicted that the country’s economic growth in 2022 will reach 9%.
The next meeting of the MPC in Georgia will be held on September 14.