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The central bank, National Bank of Georgia (NBG), on April 29 cut its refinancing rate by 0.50pp to 8.5%, pointing to local and global demand-side disinflationary pressures as well as lower oil prices. NBG predicted that due to temporary factors inflation would remain high for several months, then gradually decline, and that in the first half of 2021 it would approach the 3% target level. The inflation rate accelerated to 6.9% y/y in April from 6.1% y/y in March as prices increased on average by 0.9% in the month, according to Geostat.
4.2.2 PPI dynamic
Georgia’s PPI for industrial products up 6.7% y/y in February
Georgia’s Producer Price Index (PPI) for industrial products increased by 6.7% y/y in February this year, after a 7.1% and 7.8% y/y rise in January and December, respectively, according to the national statistics office.
It was the lowest producer inflation since June last year as cost decreased for manufacturing, electricity, gas, steam and air conditioning supply and mining. On a monthly basis, producer prices decreased by 0.3% in February.
4.3 Fixed investment
Georgia -Fixed capital 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 investment
Gross fixed capital formation (GEL mn)
3,520.3 2,458.8 3,190.9 3,136.7 3,292.4 2,213.3 2,984.2 3,215.3
Source: CEIC
19 GEORGIA Country Report July 2020 www.intellinews.com
