Real GDP growth was 4.7% y/y in December 2017
Georgia’s economy expanded 4.7% y/y in December 2017, according to GeoStat’s rapid estimates. Real GDP growth was 4.7% y/y in 4Q17 (5.7% in October, 3.7% in November and 4.7% in December) and 4.8% y/y for the entire 2017. In December 2017, the growth was recorded in social and personal services, healthcare, hotels and restaurants and manufacturing, while growth was down in electricity, gas and water supply, communication, transport and construction sectors. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
Inflation was 4.3% y/y and 0.6% m/m in January 2018
The annual CPI inflation retreated to 4.3% in January 2018 from 6.7% inflation in previous month, according to GeoStat. Core inflation was also down to 3.0% in January from 4.7% in previous month. Annual price changes were driven by price increases in food and non-alcoholic beverages (+4.7% y/y, +1.44ppts), transport (+6.6% y/y, +0.91ppts), and alcoholic beverages and tobacco (+11.5% y/y, +0.75ppts) categories. On a monthly basis, there was 0.6% inflation in January 2018. Price increases in food and non-alcoholic beverages (+1.7% m/m, +0.52ppts) and housing, water, electricity, gas and other fuels (+2.7% m/m, +0.21ppts) and price decrease in clothing and footwear (-2.1% m/m, -0.08ppts) categories were the major drivers of monthly Inflation dynamics.
NBG keeps its policy rate unchanged at 7.25%
At its meeting on 31 January 2018, NBG’s monetary policy committee decided to keep its policy rate at 7.25%. NBG noted that despite recent appreciation of the nominal effective exchange rate, the effect of its recent depreciation on inflation persists. Inflation was above the 4.0% target in 2017 and came in at 6.7% in December 2017, mostly driven by one-off factors. NBG, however, anticipates that the annual inflation rate will decrease in the first months of 2018, and remain close the target rate of 3.0% during 2018. The next committee meeting is scheduled for 14 March 2018.
