Macroeconomic Forecast Georgia

According to latest data from the National Bank of Georgia (NBG), inflation in Georgia ticked back up to 0.5% y-o-y in September, from -3.1% in August. The latest data affirms our view that Georgia will be able to avoid a protracted period of deflation, with our end-year consumer price growth forecast remaining at 0.5% y-o-y. Our core view reflects our expectation that despite the sharp recession in Georgia, that inflationary pressures will remain on account of the devalued currency and rising commodity prices. In 2010, we forecast inflation to average 2.5% y-o-y.

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