The National Bank of Georgia predicted, that Georgian economy would increase by 5% in 2022. However, from the current perspective, the growth rate would be in the range of 3-4%.
The Monetary Policy Committee (MPC) of the National Bank of Georgia decided to increase the refinancing rate by 0.5 pp. The monetary policy rate amounted to 11.0%.
“Due to the increased risks of high inflation expectations, the gradual increase of the monetary policy rate over the past year led to the tight monetary policy. However, in the face of even more intensified inflation risks and inflation being above the target for a long time, the Monetary Policy Committee considered it appropriate to increase the policy rate by 0.5 percentage points. Monetary policy will keep a tightening bias until the risks of rising inflation expectations are sufficiently mitigated.
As for the foreign demand, after a significant recovery during 2021 and the beginning of 2022, certain risks emerged in this direction, which in the light of military actions are related to the expected reduction in foreign demand from Georgia's two important trading partners. According to the preliminary data, in January-February 2022, exports of goods have increased by 54.5% annually. In the same period, the revenues from international travel have increased approximately 9-fold year-on-year, although the decrease compared to the corresponding period of 2019 is still significant (34.3%). Goods imports have also increased against the background of activated domestic demand - in January-February 2022 by 47.2 % annually”, - the report reads.
