Annual inflation in Georgia accelerates to 0.5% in March - National Bank

TBILISI. April 5 (Interfax) - Inflation in Georgia in March 2024 reached 0.5% in annual terms (versus March 2023), the National Bank said.

Annual inflation reached 0.3% in February.

Consumer prices rose 0.01% in March compared to February.

"Low inflation, on the one hand, is associated with the normalization of local inflation to the target level of 3%, which is the result of tight monetary policy. At the same time, world food prices are falling, and this trend is largely being maintained. Along with a gradual decline in external shocks, this contributes to the low level of inflation," the National Bank's monthly inflation review said.

The National Bank also said that, following a sharp increase in the cost of international transportation last winter due to tensions in the Red Sea region, prices decreased in the spring, reducing the impact of external risks on inflation.

Inflation in Georgia fell to 0.4% in 2023 from 9.4% in 2022 and 13.9% in 2021, the National Bank said.

Previously, it was reported that, due to a noticeable slowdown in inflation, the National Bank of Georgia has reduced the refinancing rate twice since the beginning of the year, by 0.5 percentage points in January and 0.75 percentage points in mid-March (to 8.25% per annum).

The National Bank's December forecast shows inflation at 2.9% in the first quarter of 2024, while in the second and third quarters it is expected to rise to 4.9% and 4.3%, respectively. In the fourth quarter, inflation will decrease to 3.3%.