Annual inflation remained close to the NBG’s 3.0% target through 9M18, coming in at 2.7% in September. The NBG maintained a moderately tight monetary policy stance due to increased risks from imported inflation in 1H18, cutting the key rate by 0.25bps to 7.0% in July. We expect annual inflation at 2.9% in 2018 and at 3.9% in 2019, reflecting pass-through impact of GEL depreciation and higher world commodity prices. We also anticipate the monetary policy rate to remain at 7.0% until mid-2019.
Source: G&T