Tbilisi (GBC) - Acting President of NBG, Natia Turnava, while giving a report to the Finance and Budget Committee, stated that the monetary and credit and exchange policy of the National Bank of Georgia will ensure price stability in the medium term, which will increase the stability of the Georgian economy against potential shocks and will contribute to the stable and long-term growth of the economy.
"Low inflation is the result of lower inflationary expectations and lower local inflation amid tight monetary policy. Also, during the last year, the strengthening of the lari exchange rate, together with the gradual reduction of the effects of external shocks, significantly contributed to the decrease of imported inflation and led to a decrease in overall inflation. It should be noted that the government's policy aimed at fiscal consolidation and measures aimed at strengthening competition in individual commodity markets made a positive contribution to the process of reducing inflation," Natia Turnava noted.
As of November 2023, headline inflation is 0.1 percent, and core inflation is 1.8 percent. According to the current macroeconomic forecast of the National Bank, until the end of 2023, inflation will remain below the target rate of 3%. Finally, in the medium term, inflation will stabilize around the 3% target. It is worth noting the fact that the ratio of credit activity to GDP is lower than the trend.
"At the current stage of development of Georgia's economy, the target rate of inflation from 2018 is 3%, which is a long-term target rate for us. The inflation target of 3% is a medium-term indicator. Focusing on the medium term is of particular importance. Due to the fact that shocks are constantly occurring, inflation will be different from the target level for the most part, however, as a result of the policy implemented by the National Bank, it will always move towards this indicator in the medium term," noted Natia Turnava.
The Acting President of the National Bank presented to the Finance and Budget Committee of the Parliament today, in accordance with the Organic Law of Georgia "On the National Bank of Georgia", the draft of the main directions of monetary and credit and currency policy for the next three years. tools and the current macroeconomic environment and risks are reviewed.
