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4.2 Inflation
4.2.1 CPI dynamics
Georgia’s inflation accelerates to 4.9% y/y in August
Georgia’s consumer price index inflation accelerated to 6.4% y/y in September from 4.9% in August and 4.3% y/y in July, statistics office Geostat has announced.
The central bank in Tbilisi hiked its key interest rate twice in September, by 50bp each time. The nominal effective exchange rate of the Georgian lari (GEL) has remained undervalued, while inflationary expectations have persisted, the regulator explained on September 25, when bringing in the second hike.
Under circumstances where there are broad expectations—albeit not supported by the fundamentals—for a sharp weakening of the GEL, it is possible that what is anticipated comes to play an important role in the formation of prices, pushing up the inflation rate.
17 GEORGIA Country Report November 2019 www.intellinews.com
