05.Nov .2020 14:00

Koba Gventadze: reduced joint demand has an impact on decreasing inflation

Koba Gventadze: reduced joint demand has an impact on decreasing inflation
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The President of the National Bank of Georgia Koba Gvenetadze declares, that the reduced joint demand has an impact on decreasing inflation.

According to the President of the NBG, taking into account this factor, it is expected that inflation will be closer to 3% target by the end of this year. Koba Gvenetadze spoke about it while presenting the monetary policy report.

“According to the NBG’s current forecast, real GDP will decrease by 5% in 2020, while it is expected to increase by 5% in 2021, which means that the current forecast has remained unchanged. Although real GDP growth forecast for 2020-2021 remained unchanged, the decomposition of this growth has changed slightly. According to the updated forecast, while part of the firms may exit the market amid prolongation of weak external demand, hence reducing potential GDP, strong lending, on the other hand, strengthens the domestic demand. Such changes in driving forces means slightly less disinflationary process, which was also reflected on the inflation forecast”, Koba Gvenetadze noted.