Page 17 - bne IntelliNews Georgia country report October 2017

lari. The currency steeply depreciated over 2014-2015, stabilised across the first three quarters of 2016 and then depreciated abnormally quickly – by 19% – in the last two months of the year.
The central bank, which was criticised by the ruling Georgian Dream party for its inflation management in 2014-2015, sought to contain what it deemed as "one-off factors" affecting the currency in late 2016 by intervening in foreign exchange markets.
The Georgian central bank said in May that it expected inflation to stay above its 5% target this year due to "supply-side pressures". The regulator tightened its monetary policy by increasing its key refinancing rate by 25 basis points in May and said it did not expect further rate increases "all things being equal".
In a statement on July 26, the Georgian central bank said that the hike in consumer prices was expected to reverse in the second half of the year.
On a monthly basis, consumer prices increased by 0.2% in August.
4.2.2 PPI dynamic
Georgia’s PPI rises in August
Georgia’s annual inflation in domestic producer prices increased from 10.7% in July to 11.5% in August. Producer price inflation is on a six-month trend of escalation, rising from November 2016’s 1.7% to above 9% since the start of this year, moving in parallel with the CPI.
The rise in PPI was mainly attributed to an 11.4% expansion in production prices for manufacturing, a 18% hike in mining and quarrying prices and a 10.1% increase in the prices of electrical energy, gas, steam and hot water.
On a monthly basis, producer prices edged up by 0.8% in August.
17 GEORGIA Country Report October 2017 www.intellinews.com