BAKU, Azerbaijan, April 12. Georgia’s inflation rate in 2022 is projected to reach 11 percent, Trend reports via Europe and Central Asia Economic Update from the World Bank (WB).
Georgia’s inflation rate remained up in 2021 at 9.6 percent, reflecting higher commodity prices and pass-through from earlier depreciation, while food and fuel prices contributed over five percentage points to the overall inflation rate, the WB said.
Meanwhile, the National Bank of Georgia (NBG) increased the refinancing rate to 11 percent on March 30, 2022, in order to somewhat stabilize inflationary risks.
According to the report, due the hostilities between Russia and Ukraine, and the subsequent disruption in supplies, the increased commodity prices, especially oil products prices, will affect Georgia’s economic development in 2022.
“This may be mitigated partly by long-term fixed-price contracts for gas supply and a shared border with Russia that will maintain basic supply flows,” the report said.
However, amid the crisis in the region, Georgia will be able to increase its transit potential through the Caucasus Transport Corridor, the report noted.
Meanwhile, Georgia’s GDP growth in 2022 is expected to drop to 2.5 percent, compared to the initial forecast of 5.5 percent, the WB said.
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