National Bank Notes ‘Low Inflation’

For the first time in last three years inflation rate has not exceeded 7% and dropped to 6,2% in 2005, the Georgian National Bank reported on January 9.

“Suspension of increasing inflation level was made possible through reasonable fiscal policy and stable exchange rate of GEL,” Davit Amaglobeli, Vice-President of National Bank, said.

In recent years highest level of inflation was in 2004 – 7,5%.

According to the National Bank Georgia is far ahead of some other countries from the Commonwealth of Independent States (CIS), where consumer price inflation rate has reached two-digit figures, including in Russia, Azerbaijan, Ukraine, Moldova and Belarus.

Inflation rate is set at 5-6% for 2006. But opponents say that the forecast is unrealistic, especially after the increase of gas price by Russia.

“Our target next year [in 2006] will be the inflation not to reach two-digit figures,” Roman Gotsiridze, the President of National Bank, said at the parliamentary hearing on December 22.

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