BAKU, Azerbaijan, April 28
By Tamilla Mammadova – Trend:
The extraordinary situation created in Georgia and worldwide due to the coronavirus is the reason for upward inflation, said Koba Gvenetadze, Head of the National Bank of Georgia, Trend reports via Georgian media.
According to him, Georgia is a country dependent on tourism and the coronavirus has affected this sector the most.
"A separate assessment was made by the International Monetary Fund for service-dependent countries, which noted that service-dependent countries find it more difficult to recover from this type of shock. Georgia lost up to $3 billion in foreign exchange earnings, which impaired the current account deficit and created a reassure on the exchange rate, which was reflected in prices. At the same time, the prices of consumer goods have risen significantly on the international market: wheat, sunflower, oil, sugar," he said.
In addition, due to restrictions imposed to contain the COVID-19 pandemic, companies have increased operating costs, which has affected prices. The combination of these factors causes high inflation, Gvenatadze explained.
As for forecasts, the NBG president predicts that inflation will start reduction from 2022.
"Given the changed circumstances since the previous meeting, according to the updated forecast, other things being equal, inflation will average around 6.5 percent in 2021 and then gradually approach the target. The forecast for economic growth is about 4 percent in the baseline scenario," he said.
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