BAKU, Azerbaijan, Aug. 13
By Tamilla Mammadova – Trend:
Annual inflation in the second quarter of 2020 amounted to 6.5 percent in Georgia, Trend reports with reference to National Bank of Georgia (NBG).
This is the result of balancing two opposing factors - a decline in aggregate demand, which lowers inflation, and an increase in production costs, which pushes inflation upward and shocks the economy in the face of COVID-19 restrictions.
Taking into account these factors, the National Bank of Georgia predicts that inflation will remain above the target for the year, as, according to current estimates, in 2020, supply factors will outweigh the effect of reduced demand.
According to the bank, the expected dynamics of economic growth also slightly changed.
Thus, NBG predicts real GDP will contract by 5 percent in 2020, despite the fact that significant foreign aid from international financial institutions will partially offset the consequences of the severe shock.
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