Archil Mestvirishvili, the Vice-Governor of the National Bank of Georgia (NBG), says the central bank already sees a trend of decreasing local inflation. Another factor that Mestvirishvili focuses on is the trend of salary growth in the country.
In March, the inflation rate decreased to 5.3%, the lowest level in the last two years. According to the forecast of the National Bank, in the second half of the year, inflation may drop below the targeted 3%.
"We have already seen a trend of reduction in local inflation, if it is sustainable, we will already have the opportunity to reduce it. In 4Q, the growth rate of wages was 21%. The salary increase is good for sure, but it is important to be accompanied by productivity.
When the reduction of inflation occurs at the expense of imported products, it does not give us the opportunity to make a decision to reduce the refinancing rate. If we see a trend of reduction in local inflation and if we see that it is sustainable, then we will take this step," said Archil Mestvirishvili.
According to the decision made late in March, the NBG kept the refinancing rate unchanged at 11%.
