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Georgian National Bank increases forecast for economic growth of country

Finance Materials 6 February 2020 15:52 (UTC +04:00)

BAKU, Azerbaijan, Feb. 6

By Tamilla Mammadova – Trend:

The National Bank of Georgia (NBG) predicts five percent economic growth in the country in 2020, Trend reports citing Georgian media.

According to the bank, in the face of rising inflation and despite the tightening of monetary policy, the factors stimulating the growth of aggregate demand are strong.

“The increase in domestic demand and investment will be associated with an increase in fiscal incentives and lending trends. Against the background of higher inflation and higher inflation expectations, the current macroeconomic forecast suggests that monetary policy will remain tight and only in accordance with lower inflation expectations will the rate be reduced to a neutral level,” the bank said.

As NBG President Koba Gvenetadze says, the high economic growth observed in 2019 occurred at the account of export and tourism growth.

According to Gvenetadze, the tourism sector experienced losses as Russia banned flights to Georgia, but the country compensated for the damage with the increased number of tourists from other countries.

He also emphasized the measures the National Bank took to reduce inflation.

In Gvenetadze's words, the inflation rate equaled 7 percent at the end of 2019.

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