The monetary and credit policy of the National Bank of Georgia ensures price stability in the medium term, which will increase the stability of the Georgian economy against potential shocks and contribute to the stable and long-term growth of the economy, - Natia Turnava, the Acting President of the National Bank, said while giving a report to the Finance and Budget Committee.
According to her, inflation will remain at a low level in 2023, and it will stabilize at the target level of 3% in 2024.
"Low inflation is the result of lower inflationary expectations and decreased local inflation amid tight monetary policy. Also, during the last one year, the strengthening of the GEL exchange rate, together with the gradual reduction of the effects of external shocks, significantly contributed to the decrease of imported inflation and led to the decrease of the total inflation. It should be noted that the government's policy aimed at fiscal consolidation and measures aimed at strengthening competition in individual commodity markets made a positive contribution to the process of reducing inflation," noted Natia Turnava.
According to her, as of November 2023, total inflation is 0.1 percent, and base inflation is 1.8 percent. According to the current macroeconomic forecast of the National Bank, until the end of 2023, inflation will remain below the target rate of 3%. Finally, in the medium term, inflation will stabilize around the 3% target. It is worth noting that the ratio of credit activity to GDP is lower than the trend.
"Focusing on the medium term is of particular importance. Due to the fact that shocks are constantly occurring, inflation will be different from the target level for the most part, however, as a result of the policy implemented by the National Bank, it will always move towards this indicator in the medium term," noted Natia Turnava.
