The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on December 23, 2009 and decided to keep its main policy rate (the refinancing rate) unchanged at 5 percent.
 
The annual inflation rate was 2.7 percent in November and the average annual inflation stands at 1.9 percent. Current forecasts point to a 3-4 percent inflation by end-year and to a 6 percent inflation rate next year.

The GDP forecast for 2009 has not changed since the previous MPC meeting standing at around -4 percent. GDP growth rate in 2010 is projected to equal 2 percent. 

The banking system witnessed the continuation of the deposit growth tendency. As it was expected, commercial banks increased credit operations, which led to an expansion of banks loan portfolio within last month. It is expected that in the next few months the uptrend in credit activity will be preserved.

Central banks of the developed countries expect the economic recession to be over, but due to its slow nature they refrain from halting fiscal and monetary stimulus measures. Recovery in the financial markets represents a factor promoting economic growth. Forecasts of oil price hikes in the international markets, pointing in the same direction, creates inflationary pressures.

The National Bank of Georgia will closely monitor current developments in the economy and financial markets and will in due course act accordingly. 

The next meeting of the Monetary Policy Committee will take place on January 20, 2010.