10% Inflation Rate Reported

According to the National Bank of Georgian (NBG) inflation rate has reached 10% starting from May, Rustavi 2 TV reported on July 1.

The NBG cited external factors, mainly rising energy prices as a reason behind the increasing inflation rate in Georgia. Roman Gotsiridze, the President of NBG told Rustavi 2 that increased gas and electricity prices are to blame.

The IMF has already called on the Georgian authorities to show caution in spending policy, according to the Rustavi 2.

An IMF team, which visited Georgia in May 12-19, said that as of end-April 2006, twelve-month inflation was about 6%. The mission supported the authorities? efforts to target an annual inflation rate of between 5 and 6 percent for 2006.

The 2006 budget sets inflation rate at 5-6% – forecast which was slammed by the opposition as not realistic during the 2006 budget discussions in December, 2005.

At that time the NBG President Roman Gotsiridze told parliamentarians that a major goal in 2006 was not to let the inflation rate reach two digit figures.