Real GDP growth was 5.6% y/y in December 2018
Georgia’s economy expanded 5.6% y/y in December 2018 bringing 4Q18 real GDP growth at 4.8% y/y, according to Geostat’s rapid estimates. Overall, real GDP growth averaged 4.8% y/y in 2018. In December 2018, the growth was recorded in manufacturing, construction, hotels and restaurants and real estate operations sectors, while growth was down in electricity, gas and water supply, transport and financial intermediation sectors. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics. The quarterly real GDP growth figures will be updated in March 2019.
NBG reduces its policy rate by 0.25ppts to 6.75%
At its meeting on 30 January 2019, NBG’s monetary policy committee decided to reduce its policy rate by 0.25ppts to 6.75%, quoting a weak inflationary pressure. The NBG noted that inflation remained close to the target level of 3% throughout 2018, with inflation rate at 1.5% in December 2018. The central bank expects the annual inflation rate to remain close the target rate of 3.0% during 2019 and sees room to reduce the monetary rate further in 2019; According to NBG, the speed of normalization will depend on how fast the output gap will close on one hand, and how strongly the increased regional macroeconomic risks will be transmitted to Georgian economy, on the other. The next committee meeting is scheduled for 13 March 2019.
