Macroeconomic Forecast Georgia

Georgian consumer prices grew by 0.1% y-o-y in July, a sharp deceleration of inflation from the 2.3% CPI growth seen in June. The principal drivers of disinflation were the transport and utilities components of the consumer price basket, which fell by 8.8% and 5.3% y-o-y, respectively. In light of this, we have cut our end-2009 CPI growth forecast to 0.5% y-o-y (our end-2010 forecast remains at 3.0%), and we note that a period of deflation is likely in H209.

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