Koba Gvenetadze, the governor of the national bank of Georgia, on November 2 said the financial institution expected domestic inflation to begin to decline from February and approach the target level in the second half of 2023.
Gvenetadze warned if inflation exceeded expectations, the development would lead to a wage-price spiral – a prolonged loop in which inflation led to higher wage growth, fueling even higher inflation – but noted “we expect inflation to remain at the current level and to begin to decrease noticeably from February”.
He added “positive trends” observed in international commodity markets could serve as “preconditions and driving factors” for the future decrease of inflation, adding they would “gradually be transmitted to the local market”.
In September, Georgia’s consumer price index increased by 0.8% compared to the previous month, while the annual inflation rate amounted to 11.5%, according to the national statistics office.
The inflation data showed the prices of food and education increased in September month-on-month, with healthcare-related costs and transport prices decreasing in the same period. (Agenda/Business World Magazine)