8% Inflation Rate Targeted for 2008
Inflation will be contained below 8% next year, Davit Amaglobeli, the acting president of the National Bank, and Nika Gilauri, the finance minister, said on November 29.
They said current inflation was over 10%. Twelve-month inflation was 11.2% as of the end of October, according to the IMF.
“Through coordinated implementation of monetary and fiscal policy, it will be possible to counter inflationary pressure in a short period of time,” Amaglobeli said. He added that the current high inflation rate was a result of “external factors.”
Speaking in Parliament on November 22, PM Lado Gurgenidze said that strict monetary policy would be inevitable in 2008. “This in turn will have a temporary negative effect on the growth rate. But without this strict monetary policy we won’t be able to control already high inflation,” Gurgenidze said.
He pointed out that it would be impossible to use “fiscal levers” to control inflation next year, “because of our planned social policy,” involving increased pensions and a new state funded employment program.
“So we will work closely with the National Bank of Georgia to use monetary levers to control inflation in 2008,” Gurgenidze said.