The President of the National Bank, Koba Gvenetadze declares, that high inflation is very bad, but it is impossible to do something that will reduce inflation very soon.
Since December last year, Geostat has calculated inflation in a new way. The agency took into account the subsidizing program due to which inflation has decreased by several percentage points during this period. This one-time factor will have an impact on additional growth and because of this, inflation has already risen to 12%, it may rise to an additional 16% in December.
The President of the NBG finds it difficult to say if inflation will increase further, as events are developing very fast and the price of oil is very high.
"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 price, inflation may increase again, but I say again, this is a one-time factor that will end and then inflation will return to its target”,- Gvenetadze said.
According to Gvenetadze, this process is going for a long time not only in Georgia but also in other developing countries.
“High inflation is very bad, but it is impossible to do something that will reduce inflation very soon. This is a process caused by objective reality and factors, which we must understand,"- said Koba Gvenetadze.
