The NBG kept the key rate unchanged at 10.0% on 27 October 2021 for the 2nd time, after raising it by 50bps in August,-according to TBC Capital report.
The central bank said that increased inflation remains a challenge for Georgia, as consumer prices increased by 12.3% in September, and expected to remain high through Feb-22.
The regulator sees that key sources of high inflation being one-off factors, such as significant increases in prices of food and oil on international markets and the rapid growth of international transportation costs, noting also pend-up demand and a high lending growth. The NBG also stressed positive developments and revised the 2021 growth projection upwards to 10.0% from 8.5%.
According to the NBG’s current forecast, inflation expected to decline from spring 2022, supported by tight monetary policy and fiscal consolidation along with the fade-out of one-off exogenous factors. Notably, the NBG does not rule out further rate hikes if the inflationary risks materialize in case of strong supply shocks. The next committee meeting is scheduled for 8 December 2021.
