BAKU, Azerbaijan, August 13
By Tamilla Mammadova – Trend:
Lower interest rates will help the economy recover and increase access to finance in Georgia, Trend reports via the National Bank of Georgia (NBG).
As reported, the change in interest rates by the National Bank will have a full impact on the economy in about 4-6 quarters.
If the economy develops in accordance with NBG forecasts, inflation will gradually return to the target level early next year, which will further reduce interest rates.
“In any case, we will use all the tools at our disposal to maintain price stability and the purchasing power of the lari, which means that the overall price growth will return to 3 percent in the medium term. Our role in general is to influence interest rates on general expenses. We must ensure a return to the inflation target of 3 percent. Low and stable inflation promotes employment and economic growth. It becomes even more important,” the NBG explained.
NBG forecasts that higher production costs are expected to have a one-time impact on prices, while weak aggregate demand will reduce inflation. Given that inflation will continue to decline in the medium term, given the current situation, the NBG again lowered the interest rate in August 2020 by 0.25 percentage points to 8 percent.
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