National Bank of Georgia keeps its main policy rate unchanged
Georgia, Tbilisi, June 23 / Trend, N.Kirtskhalia /
The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) decided to keep its main policy rate unchanged at 8 percent, the NBG told Trend on Thursday.
The high annual inflation rate (14.3 percent) in May is due to an increase in the price for fuel and food products (12.1 percent), caused by the world market's impact on Georgia, the NBG said.
The country's annual core inflation hit 2.1 percent in May, excluding food and fuel prices. The inflation in the service sector reached 1 percent.
The NBG said that according to the existing forecasts, inflation will be around 8 percent by the end of the year.
The NBG also said that the real growth of the economy in the first quarter of 2011 hit 5.8 percent, which indicates a reduction in the demand growth rates. Also it is noted that reduction of prices on energy resources in world markets will positively affect the Georgian domestic market.
"If this trend will continue, the National Bank will consider monetary easing at its further meetings," the bank's report says.
The next meeting of the Monetary Policy Committee will take place on July 20, 2011.