16.Dec .2021 15:00

Macroeconomic Forecasts Are Characterized By Uncertainty Due To The Pandemic - Gvenetadze

Macroeconomic Forecasts Are Characterized By Uncertainty Due To The Pandemic - Gvenetadze
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The President of the National Bank Koba Gvenetadze declares, that inflation will start to decrease from 2022 and will gradually approach its medium-term target.

Koba Gvenetadze stated about it at the plenary sitting of the Parliament, where the main directions of the Monetary and Exchange Rate Policy for 2022-2024 must be approved.

“The Monetary Policy Committee of the National Bank of Georgia has gradually increased the refinancing rate from 8% to 10.5% this year, including by 0.5 percentage points at the last meeting. In order to prevent the temporary increase in prices from having an impact on inflation expectations in the long run, the National Bank will maintain a strict policy for a long time or tighten it further in the case of need. Inflation will begin to decline in 2022 and gradually approach its medium-term target.

The expected dynamics of inflation and interest rates largely depend on how the epidemic situation will continue both in Georgia and in the world.

Vaccines are available and the vaccination process is in an active phase, although the spread of new strains of the virus remains a significant risk. Against this background, the pace of fully restoring global mobility and returning to a pre-pandemic state is unclear. Consequently, macroeconomic forecasts are also characterized by particular uncertainty. The prognosis largely depends on the duration of the pandemic and the speed of vaccination. Such risks are of an inflationary nature and we remain committed to a strict monetary policy," said the President of the National Bank of Georgia.