The Georgian economy is recovering: The decline in inflation

According to the latest statistics from the National Statistics Service "Sakstat" (Gruzstat), annual inflation in Georgia for the period July 2022 to July 2023 was only 0.3%. This indicator was significantly below the target level of 3%. Interestingly, the previous time the annual inflation rate in the country fell below 0.5% in October 2016, amounting to 0.2%.

It follows from the analysis of price dynamics that significant changes have taken place in various sectors of the Georgian economy over the past year. Thus, prices for hotels and restaurants increased by 9.7%, for alcoholic beverages and tobacco – by 6.3%. At the same time, prices for transport decreased by 12.1%, for healthcare – by 6.9%, and for communications – by 3%. Food prices also increased, but not so significantly – by only 1.2%.

Deputy Finance Minister of Georgia, Mikhail Dondua, believes that a decrease in inflation with high economic growth indicates the correctness of the country's economic policy. He is confident that such a situation will favorably affect the welfare of the population. According to him, it is expected that the inflation rate will continue to decline during the year.

Nevertheless, the National Bank of Georgia notes that there is high uncertainty in inflationary trends against the background of positive economic forecasts. With strong demand for goods and services, additional pressure on inflation may arise. However, the regulator has increased the forecast of annual economic growth from 5% to 6% compared to last year. According to the forecasts of the National Bank, the inflation rate in the coming months will remain below the target level of 3%, stabilizing only in the medium term.

Thus, Georgia continues its path to economic revival, and the decrease in the inflation rate is one of the positive signals indicating the stability and the right economic strategy of the country.