Starting from 2013 the National Bank of Georgia will begin detailed communication of monetary policy forecasts

Starting from 2013 the National Bank of Georgia will begin detailed communication of monetary policy forecasts

25 December, 2012
Monetary policy decisions are reflected on the economy with a lag. Therefore, monetary policy decisions are made based on forecasts and on the analysis of future. Because of this, modern forecasting methods are essential for efficient monetary policy. During the past two years the National Bank of Georgia has been actively cooperating with International Monetary Fund (IMF) and European Bank for Reconstruction and Development (EBRD) to improve macroeconomic modeling and forecasting methods. Important measures have been undertaken for the improvement of infrastructural part as well as human resource development: considering the specifics of Georgian economy, “New Keynesian Dynamic Stochastic General Equilibrium” (NK DSGE) has been built that is widely used by major central banks as a main method for macroeconomic forecasting. Based on this system, the National Bank of Georgia prepares macroeconomic forecasts that will be published in quarterly Inflation Reports. Starting from 2013 the organization of Inflation Report will change as well. It will focus on future forecasts and their analysis. In addition, its publishing dates will be more timely: Inflation Report will be published in the second month of the given quarter instead of publishing it in three months after the end of the quarter. Inflation Report will become major instrument for monetary policy communication.
The schedule of Monetary Policy Committee (MPC) meetings will be optimized (the new schedule) and upon the completion of MPC meeting, quarterly meetings will be held with the analysts and media representatives to provide detailed information regarding decisions made and forecasts.
 
Furthermore, the National Bank of Georgia is working on the development of Monetary Policy Strategy public document and on the revisions of monetary policy section of the website. Regarding this, further information will be available to public in the near future.



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