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ANNUAL INFLATION AMOUNTED TO 2.7% IN SEPTEMBER

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BM.GE
29.10.18 17:39
610
Since February 2018, the annual inflation rate remained below its target level (3%). In September, annual inflation rate of consumer prices was 2.7%. In response to the low rate of inflation, the National Bank of Georgia slightly eased the monetary policy - the refinancing rate was reduced by 0.25 percentage points and currently stands at 7.0%. In the third quarter, the transport sector was the biggest contributor to the annual inflation. In particular, cost of operation of personal vehicles has significantly increased. This is caused by rising fuel prices due to increased oil prices in the world market. The National Bank of Georgia forecasts that the inflation rate will remain below the target level till the end of the year. According to the International Monetary Fund forecasts, the consumer price inflation will be 2.8% by the end of this year and 2.7% - next year.

In the current month, the International Monetary Fund has cut its global economic growth forecast from 3.9% to 3.7% for 2018-2019. The reason for this reduction is mainly the deterioration of trade relations between the US and China. Political tensions in Turkey and a sharp drop in investors’ confidence have significantly influenced the economic growth rate. IMF forecasts that in Turkey economic growth will settle at 3.5% in 2018. And by 2019, the economic growth will be 0.4%. According to the IMF forecast, Russia’s economy will grow 1.7% this year, while in 2019-2020 it will amount to 1.8%. Increase in oil prices contributes to improving economic conditions in Russia. However, sanctions expected in November will likely result in depreciation of ruble. Considered all external factors, Ministry of Finance of Georgia forecasts 4.5% economic growth for upcoming year.

Source: BAG

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