Easing inflation supports hopes for rate cuts by year-end in Georgia

Easing inflation supports hopes for rate cuts by year-end in Georgia
/ bne IntelliNews
By Iulian Ernst in Bucharest September 6, 2022

Georgia’s consumer prices increased at a moderate monthly rate (+0.1% m/m) for the third month in a row in August and the annual inflation rate eased to 10.9% y/y in the month from the peak level of 13.9% y/y in May, according to data from the statistics office Geostat.

Prices of food and transport (fuels included) rose by nearly 16% y/y while the prices in the HoReCa industry also increased by nearly 15% y/y. In contrast, the prices of clothing, communications as well as health and education systems increased by a couple of percentage points at most over the past year.

The core inflation also edged down, to 7.0% y/y in August from 7.1% y/y in July.

This supports expectations for possible rate cuts by the end of the year, which would bring the refinancing rate into the range of 10%.

Since March 30, the refinancing rate in Georgia is 11%.

TBC bank cut in July its forecast for Georgia’s inflation at the end of the year to 7.4% y/y from 8.5% previously. 

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