Annual Inflation 5.4% in August, Highest in 4 Years

Georgia’s annual inflation accelerated to its highest rate in four years at 5.4% in August from 4.9% in July, according to the state statistics office Geostat.

Inflation was driven mainly by increasing prices on alcoholic beverages and cigarettes (13.7% y/y); household maintenance and equipment (9.3%); healthcare (9.1%), and food (6.3%).

Prices on fruits, vegetables and oil were up by 48.3%, 14.9% and 12% year-on-year, respectively. Breads and cereals prices were up by 3.6% y/y in August.

Prices in the hotel and restaurant sector increased 6.1% in August, compared to the same month of last year and inflation for housing, water and energy rose 5%.

Prices in transport group were down by 1.6% y/y in August.

On a monthly basis consumer price rose 1% in August, according to Geostat.

In August, after annual inflation in July approached central bank’s 5% target, the National Bank of Georgia raised its key refinancing rate by 50 basis points to 6%. The central bank said last month that it would further tighten monetary policy with refinancing rate expected to be within 6.5% by the end of this year.