Archil Gachechiladze, General Director of Bank of Georgia, considers high inflation to be the main challenge for the Georgian economy. According to him, the inflation rate is likely to approach the target of 3% from 2022.
At the same time, Gachechiladze thinks that a further increase in the current refinancing rate may have a negative impact on borrowers.
"Probably the biggest challenge today is inflation. We deeply hope that the inflation rate will decrease and come close to the target, but the main concern here is the refinancing rate, which must not go up and become a heavy burden for the population. To me, the current refinancing rate already reflects the level needed to bring inflation back to the required level.
In 2020 corporate lending was active and there was a continuation of started projects. Among them was a mortgage incentive program.
As for this year, medium business, consumer loans and microloans are active. In fact, business recovery has become more common this year, which is a very good sign of economic health. I will repeat once again that there is a real economic activity, but inflation is the main challenge, "- Archil Gachechiladze explains.
Inflation has spiked to a 10-year high and stands at 12.3%. The refinancing rate of the NBG also hit a record high and was increased up to 10%.
