OREANDA-NEWS. December 3, 2007. The National Bank of Georgia (NBG) acting president David Amaglobeli and the minister of finance Nick Gilauri have held a joint press briefing at the NBG premises about the Georgian authorities' anti-inflation policies for 2008, the Georgian government press service informs.

"Recently, inflation in Georgia has stabilized above the comfort zone with the annual inflation above 10 percent. The main factors contributing to high inflation were exogenous factors like direct and indirect effects of record high prices on oil and major food items at international markets. However, these factors have intensified the public inflationary expectations. The rise in inflationary expectations is undesirable because it may itself become a source of inflation in the future," stated the NBG acting President David Amaglobeli. According to Amaglobeli, "the NBG and the government of Georgia believe that all available resources and instruments need to be used to conduct a more proactive anti-inflationary policy in order to bring inflation within the comfort zone."

David Amaglobeli also mentioned that "with the help of these instruments and concerted effort between monetary and fiscal authorities it will be possible to soften inflationary pressures in a short period of time, such that annual inflation stays within 8 percent during 2008. Given the disciplined and coordinated fiscal policy the NBG will conduct a tight monetary policy. The basis for conducting monetary policy will be interest rates – as it is the case in many developed countries’ central banks. It is noteworthy, that the NBG raised its interest rates three times during the last month."

The acting president also explained that low inflation implies stable prices on most of the products, albeit prices on certain products may rise while on the other may even decline. " In general, given the nature of inflation and the structure of Georgian economy, inflation is very volatile from month to month. Consequently, volatile inflation and rise in prices on certain commodities should not mislead the population such that they do not expect higher inflation than the economic fundamentals predict. Given the domestic and external factors in Georgia, there is little economic rationale for inflation to grow further."

According to the minister of finance Nick Gilauri, Georgia has sufficient fiscal and monetary instruments to bring inflation down. To this end "the NBG and Government of Georgia work together and we will all see desirable results shortly," stated finance minister.

At the end of the conference David Amaglobeli said that "the NBG and the government of Georgia stand ready to use all available means to bring inflation under control. By implementing relevant measures it should be possible to limit inflation to low levels such that once and forever the public forgets about inflation."
  
The National Bank of Georgia (NBG) acting president David Amaglobeli and the minister of finance Nick Gilauri held a joint press briefing at the NBG premises about the Georgian authorities' anti-inflation policies for 2008.