The Government of Georgia submitted a document on macroeconomic and fiscal parameters to the Parliament. According to the document, average inflation of 9.1% is expected in the country this year. This figure is exactly two folds up compared to the earlier predicted inflation rate, which was set at 4.5%.
According to the updated forecast, inflation should return to the target by 2023.
Due to higher-than-expected inflation, the National Bank of Georgia increased the refinancing rate by 0.5 percentage points to 11% on March 30.
Annual inflation in Georgia was 13.9% in January, which decreased to 13.7% in February, while to 11.8% in March, but increased to 12.8% in April. Among the consumer groups, prices increased the most sharply - by 21% in the food and transport sectors (22%).
According to the National Bank forecast, inflation will average 10.5% in the second quarter of 2022, it should be reduced to an additional 7.85% in the third quarter, and should become 7% in the fourth quarter. Accordingly, the NBG forecasts a decline in inflation by the end of the year. From 2023, the inflation rate should return to 5% and then to the targeted 3%.
