BAKU, Azerbaijan, April 14. Georgia’s inflation rate for 2023 is projected at 6.6 percent, and for 2024 - at 3.8 percent, Trend reports via Europe and Central Asia Economic Update from the World Bank (WB).
According to the report, the forecast for Georgia’s inflation rate in the current year is rather high - at 11 percent.
Due to 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, the WB said.
“Georgia is well placed to manage the economic fallout of [the hostilities between Russia and Ukraine]. Buffers remain reasonable, the macro-financial framework is credible, and the banking sector is entering the crisis in relatively strong shape, albeit with the vulnerability of high dollarization,” the report said.
Georgia was also able to maintain fiscal discipline over the past decade, although the planned budget consolidation may be slowed down due to the COVID-19 pandemic outbreak, which led to the economic downturn, the report added.
Meanwhile, 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.
To somewhat mitigate inflationary risks the National Bank of Georgia (NBG) increased the refinancing rate to 11 percent on March 30, 2022.
Meanwhile, the baseline outlook envisages Georgia’s GDP growth at 2.5 percent in 2022, with further recovery in 2023 (5.5 percent), and somewhat slowdown in 2024 (5 percent).
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