According to the international financial initiation, inflationary pressures have been increasing since the beginning of the year and the rate of inflation reached 12.3% year-on-year in September 2021 on the back of higher international food and oil prices and pass-through of last year’s depreciation. “The National Bank of Georgia reacted by increasing the refinancing rate three times in 2021 by a cumulative two percentage points, to 10% in August 2021. On the basis of strong growth in the first eight months of 2021, the economy is expected to grow by 7.5% in 2021. The gradual return of tourism could support growth prospects in 2022, projected at 5.5% growth. The main risks stem from the slow vaccine uptake, the future path of the pandemic and possible travel restrictions, as well as increased political volatility”, the EBRD notes in its report. Earlier, the IMF released it’s Outlook where Georgia ranks 16th globally and second in South Caucasus with the highest inflation rate. Both the International Monetary Fund - in our exclusive interview and the National Bank of Georgia - during the monetary committee sitting - responded to this development.
