IMF: Georgia Inflation over 11%
Twelve-month inflation was 11.2% as of the end of October and “it will be difficult to keep inflation in single digits for 2007 as a whole,” the International Monetary Fund said on November 13.
“While the rises in certain international commodity prices (including oil and food) have contributed to inflationary pressure in Georgia, the very rapid rise in broad money has also played a significant role,” the IMF mission, which visited Georgia on November 1-9, said in a statement.
In contrast, twelve-month inflation was 9% at the end of September 2007, according to the Georgian Department for Statistics.
The IMF also said that Georgia’s economic growth, which is expected to be 12-13% by the end of this year, was “impressive given the external shocks associated with Russia’s economic embargo along with higher energy and food prices.”
It also said that private capital inflows would likely exceed USD 2 billion in 2007, “although recent political developments add considerable uncertainty to the projected volume of inflows for the remainder of this year and 2008.”
The IMF mission called on the Georgian authorities to allow a greater role for market forces in determining the nominal exchange rate and to implement a tighter fiscal stance in 2008.
