TBC Capital published update from the Chief Economist. According to the report, November price indices demonstrate a further downward pressures on YoY inflation with export and import one being negative for the second month in a row. Notably, the time lag between import price index and an estimated import CPI categories should bring the latter down.
"On the domestic side, weak exports is an additional argument for the growth moderation. TBC Capital nowcasting model still indicates MoM deflation in December, at least in a seasonally adjusted terms, though we note that a similar estimate for November was lower than the actual print which was above, but still relatively closer to the target when compared with elevated inflation pressures throughout the year. With this additional evidence, the NBG’s moderately, but we would say more dovish language came in with no surprise. In fact, the latest GEL yield curve points to an even more pronounced rate cut expectations", - the report reads.
