National Bank: inflation will be less than 8 percent in 2008
By M. Alkhazashvili
(Translated by Diana Dundua)
(Translated by Diana Dundua)
Tuesday, December 4
On November 29, acting National Bank President Davit Amaglobeli and Finance Minister Nika Gilauri set Georgia’s inflation target for 2008 at “below 8 percent.”
Inflation has been a hot topic for the past year, ever since the International Momentary Fund (IMF) criticized Georgia’s inflation rate in August 2006—when it reached 14.5 percent—as posing a “serious threat to macroeconomic stability.”
Official figures show inflation to have dramatically decreased to just over ten percent since then, although economists question the accuracy of these.
For its part, the IMF said twelve-month inflation was 11.2 percent in October and sent a sharp warning to Tbilisi to keep inflation within single digits, by exercising tighter control over money supply and allowing currency to float more freely.
Amaglobeli put the worrisome inflation figure down to “external factors,” but the IMF says international price hikes on basic foodstuffs are only part of the problem.
With large scale social assistance programs planned for 2008, Prime Minister Lado Gurgenidze recently discounted the option of using fiscal levers for controlling inflation.
Instead, the government “will work closely with the National Bank of Georgia to use monetary levers to control inflation in 2008,” Gurgenidze said on November 22.
Inflation has been a hot topic for the past year, ever since the International Momentary Fund (IMF) criticized Georgia’s inflation rate in August 2006—when it reached 14.5 percent—as posing a “serious threat to macroeconomic stability.”
Official figures show inflation to have dramatically decreased to just over ten percent since then, although economists question the accuracy of these.
For its part, the IMF said twelve-month inflation was 11.2 percent in October and sent a sharp warning to Tbilisi to keep inflation within single digits, by exercising tighter control over money supply and allowing currency to float more freely.
Amaglobeli put the worrisome inflation figure down to “external factors,” but the IMF says international price hikes on basic foodstuffs are only part of the problem.
With large scale social assistance programs planned for 2008, Prime Minister Lado Gurgenidze recently discounted the option of using fiscal levers for controlling inflation.
Instead, the government “will work closely with the National Bank of Georgia to use monetary levers to control inflation in 2008,” Gurgenidze said on November 22.