Day: March 13, 2024

On March 13, the Monetary Policy Committee of the National Bank of Georgia (NBG) reduced the key refinancing rate by 0.75 percentage points to 8.25%.

Inflation remains low in Georgia. In February, headline inflation increased by 0.3% annually, while core inflation was 2.4%. According to the NBG, Georgia’s low inflation is the result of tight monetary policy and lower inflation expectations, as well as a significant decline in external shocks, such as those caused by the war and the pandemic. The central bank notes the lowered inflation forecast, stating that, all else equal, inflation will remain below the 3% target in early 2024 and stabilize around it in the medium term.

The NBG says that inflation risks remain, but their severity has diminished. It notes that the biggest risk to inflation now is that international transportation costs may increase due to the tensions in the Red Sea. In addition, the bank notes that in January, according to preliminary estimates, economic growth amounted to 5.8%, which indicates the neutralization of inflationary pressures from the demand side. According to the NBG’s forecast, the lag in economic activity from the pre-pandemic trend has been completely eliminated and it is expected that economic growth will stabilize around its potential level in 2024.

In view of the positive trends, the NBG decided to slowly withdraw its tight monetary policy stance and lowered the key interest rate by 0.75 percentage points to 8.25 percent. However, “if factors amplifying inflation expectations become apparent, the NBG will maintain a tight monetary policy stance for a longer period or further tighten its policy,” – the NGB notes.

The next meeting of the Monetary Policy Committee will be held on May 8.

Also Read:

• 31/01/2024 – NBG Reduces Key Refinancing Rate from 9.5% to 9%
• 20/12/2023 – NBG Reduces Key Refinancing Rate from 10% to 9.5%
• 25/10/2023 – NBG Keeps Key Refinancing Rate Unchanged at 10%
• 13/09/2023 – NBG Reduces Key Refinancing Rate from 10.25% to 10%

On March 12, the Prime Minister of Georgia Irakli Kobakhidze met with the Secretary of the Security Council of Azerbaijan Ramil Usubov during the latter’s official visit to Georgia. Usubov has also met with the Defense and Interior Ministers of Georgia. According to Georgian Defense Minister Irakli Chikovani, this year Georgia will host Azerbaijan-Turkey-Georgia trilateral defense ministerial.

“The longstanding relationship between our countries has evolved into a robust strategic partnership. Had an opportunity to discuss crucial bilateral and regional matters between our nations,” Prime Minister Kobakhidze tweeted following the meeting, adding that “Georgia remains committed to promoting peace in the region, fostering stability and cooperation for the benefit of all.”

According to the Ministry of Defense of Georgia, during the March 12 meeting between Georgian Defense Minister Chikovani and the Azerbaijani official the parties discussed the defense cooperation issues and the importance of mutual strategic cooperation.

According to the Georgian MOD, Minister Chikovani reaffirmed Georgia’s readiness to contribute to the process of establishing peace and stability in the South Caucasus. During the meeting, the importance of the Azerbaijan-Turkey-Georgia trilateral cooperation format was also emphasized.

The Azerbaijani official has also met with the Minister of Internal Affairs of Georgia Vakhtang Gomelauri. According to the Georgian MIA, the parties discussed the importance of enhancing security cooperation, the regional developments and other “relevant issues in the security field.”

Minister Gomelauri thanked the Azerbaijani side “for the fruitful cooperation” and expressed hope that “the partner relations will be actively continued and expanded in the future in various directions.”

Also Read:

• 11/12/2023 – Georgian Parliament Speaker Meets Azerbaijani President
• 28/11/2023 – Azerbaijan-Georgia-Turkey Trilateral Defense Ministerial