BAKU, Azerbaijan, Dec.9
By Tamilla Mammadova – Trend:
An economic downturn of 5 percent is quite realistic in 2020 in Georgia from today's point of view, said the President of the National Bank of Georgia Koba Gvenetadze, Trend reports via Georgian media.
He made the remark during the online press conference held after the meeting of the Monetary Policy Committee.
"As for the next year, we think the economy can grow by 5 percent in 2021. Do not forget that the fiscal stimulus is also quite high according to the planned budget. However, we must keep in mind, that it is very difficult to make predictions due to the COVID-19 and this is associated with a lot of uncertainty. It depends on the availability of the COVID-19 vaccine, including in our country," said the president of the National Bank.
According to Gvenetadze, macroeconomic forecasts will be updated in February 2021.
The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on December 9, 2020, and decided to keep the refinancing rate unchanged at 8 percent.
"Annual inflation has been at 3.8 percent in recent months. According to the current forecast, other things equal, the inflation rate will hover close to the target level in the first half of 2021. Inflation dynamics are mainly determined by weak aggregate demand and this impact is expected to persist next year as well. Still, the effect on aggregate demand coming from increased pandemic-related social and economic support fiscal measures of 2020-2021 is noteworthy," the report said.
The Monetary Policy Committee also took into account the supply-side factors, such as the increase in production costs due to additional restrictions in the wake of the pandemic. The Committee also took note of the uncertainties surrounding the prolonged pandemic and the global restrictions.
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