Press Conference of Koba Gvenetadze
In June, the annual inflation rate has increased, reaching 7.1%. The price increase on Tobacco products and fuel has contributed by 2.6 percentage points. The increase in the inflation rate is temporary, it is expected inflation to start declining from the second half of the 2017 and with the after the impact of one-off factors will die out in the beginning of 2018 the inflation will converge to its target level. Thus, there is no need for further tightening of monetary policy. Given the absence of additional shocks in the medium term, the policy rate is expected to decrease to its neutral level.
In the first half of 2017, economic growth indicators reveal higher than expected growth, which can be attributed to the improvement of the external sector. In particular growth of exports of goods and services (tourism) should be noted, as well as the increase in remittances. Along with the rise of external inflows, consumption has increased, contributing to economic growth. Yet, domestic demand and overall economic activity are still below its potential level; thus, it does not create demand side pressure on inflation,"- stated the Governor of NBG.
Within the frameworks of press conference, Koba Gvenetadze responded to the questions of media representatives.