28.Oct .2021 11:00

Inflation May Still Rise Due To High Price On Food And Oil - NBG

Inflation May Still Rise Due To High Price On Food And Oil - NBG

Koba Gvenetadze, President of the National Bank of Georgia (NBG) declares, that the inflation rate will start to reduce in the country from 2022 and will approach the target, but by then the inflation rate may increase even more.

The point is that the annual inflation is compared with the prices observed in the same period of the last year, while in December 2020, Geostat took into account the effect of the tariff subsidy program, which reduced inflation by 2 percentage points and it amounted to 2.4%. This year, the current record high inflation will be compared to the period when the subsidy was in force, so the volume of inflation, which is now 12%, will increase by a few more percentage points.

"So far I cannot say exactly how much the inflation may rise, because things are changing very fast. Today, oil price is 2-fold high compared to the last year. The National Bank cannot have an impact on oil and food prices. Therefore, due to high food and rising oil prices, inflation may rise again, but I say again, this is a one-time factor that will end and then inflation will return to its target”, - explains Koba Gvenetadze.

The National Bank kept the refinancing rate unchanged at 12%.