Page 50 - GEORptNov21

Bank of Georgia says further rate hikes would hurt debtors
markets. The NBG said the upward pressure on prices was also driven by the rapid growth of international transportation costs.
The policy-setting committee also took into account pent-up demand and a high growth rate in lending. Strong credit activity, albeit boosting the economy, hindered the reduction of inflation, the NBG stated.
The central bank took note of some positive developments including a 24% annual increase in exports in January-September – 9% higher year on year. It also cited 22% growth in imports, against the backdrop of increased domestic demand in the country.
The National Bank of Georgia's key interest rate is high enough to bring surging inflation under control, said Archil Gachechiladze, CEO of the Bank of Georgia, ahead of the central bank's monetary board meeting on October 27.
Gachechiladze, CEO of one of the country's two main lenders alongside TBC, considers high inflation – at 12.3% as of September – to be the main challenge for the Georgian economy, but he also stressed that the 10% refinancing rate is at a level high enough to bring the inflation under control and he argued that more rate hikes would severely hurt debtors. He said that given the increased refinancing rate, the inflation rate from 2022 is likely to approach the target of 3%.
"Probably the biggest challenge today is in the direction of inflation. We expect that the inflation rate will go down and it will be close to the target, but the main concern here is the refinancing rate, which should not go too high and hurt the population too hard. The balance sheet is protected and the current refinancing rate, in my opinion, already reflects the level needed to bring inflation back to normal,” he said, as quoted by Business Media.
8.3 Stock market
Georgia market cap at USD727mn in May 2021
In May 2021, Georgia’s market capitalisation accounted for USD 727.45mn with daily turnover value of GEL 366.78 in February, according to the Georgian Stock Exchange (GSE).
50 GEORGIA Country Report November 2021 www.intellinews.com