Page 36 - GEOGRptJun19

Insurance companies' assets amounted to GEL743.2mn and their capital was GEL221.6mn at the end of 2018. One year earlier, the company's assets were GEL580.2mn and their capital was GEL154.2mn.
As of 31 December 2018, 17 insurance companies were registered. Sixteen have life and non-life insurance licences, while one has only a non-life licence.
8.2 Central Bank policy rate
Georgia’s policy rate held at 6.5%
Georgia’s central bank sees 5% growth, inflation above target this year
Georgia’s central bank held its benchmark interest rate at 6.50% percent on May 1, citing forecasts that suggest annual inflation will stay close to its 3% target this year. Annual inflation in March stood at 3.7% , up from 2.3% in February.
The regulator cut the rate to 6.75% in January and 6.50% in March.
The central bank said that the increase in annual inflation in March was a one-off caused by the hiking of excise taxes on tobacco—which contributed 1.3 percentage points to inflation.
“According to current forecasts, with other things being equal, inflation will move to the 3% target level after the expiration of this single (exogenous) factor,” it added in a statement.
The central bank plans to ease interest rates towards 5%-6% over the next two years, central bank governor Koba Gvenetadze told Reuters in January. “[T]aking into consideration risks from the foreign sector, it is expected that the normalisation of policy will be carried out gradually,” the central bank commented on May 1.
The central bank in Tbilisi has upheld its forecast of a robust real GDP growth of 5% for Georgia in 2019. The prediction is given in its May 8 monetary policy report.
Inflation will, however, remain above the 3% target throughout the year and ease no sooner than 2020, the national lender said. The central bank consequently envisages moderate 50bp rate cuts over the next two years, taking the benchmark rate to 6.0% in Q1, 2021.
Consumer prices have risen by 4.1% over the past 12 months in Georgia, with the country experiencing its highest annual inflation rate since January 2018, statistics office Geostat reported. Georgia’s central bank held its benchmark interest rate at 6.50% on May 1, citing forecasts that suggested annual inflation will stay close to its 3% target this year. The central bank plans to ease interest rates towards 5%-6% over the next two years, central bank governor Koba Gvenetadze told Reuters in January.
“The current macroeconomic forecast also envisages a downward trend of the monetary policy rate in the medium term,” the monetary policy report confirmed.
According to the forecast, downward pressure on inflation coming from still weak aggregate demand will be balanced this year by the effect of excises taxes on tobacco and by imported inflation along with higher intermediate costs of servicing debt due to dollarisation. In the medium term, alongside with the elimination of one-off factors, aggregate demand is expected to increase to
36 GEORGIA Country Report June 2019 www.intellinews.com