Inflation was 3.1% y/y and 0.5% m/m in August 2018
Annual CPI inflation was 3.1% in August 2018 up from 2.8% in July 2018, according to GeoStat. Core inflation was 1.5% slightly up from 1.4% recorded in previous month. Annual price changes were driven by price increases in transport (+7.8% y/y, +1.04ppts), food and non-alcoholic beverages (+3.2% y/y, +0.96ppts) and healthcare (+5.2% y/y, +0.44ppts) categories. On a monthly basis, there was 0.5% inflation in August 2018. Price increase in food and non-alcoholic beverages (+1.5% m/m, +0.44ppts) was the major driver of monthly inflation dynamics.
Tourist arrivals up 13.9% y/y in August 2018
Total international visits to Georgia increased 10.7% y/y to 1.04mn in August 2018, according to the Ministry of Internal Affairs. A 13.9% y/y growth in tourist arrivals (0.74mn trips, 70.8% of total) drove the growth. Out of top countries, in August 2018, international visitors continued to increase from Russia (+15.8% y/y), Azerbaijan (+13.3% y/y) and Turkey (+24.4% y/y), while visitors were down from Armenia (-5.7% y/y) and Iran (-24.4% y/y). Total international visitors stood at 4.9mn (+14.1% y/y) in 8M18.
International reserves flat in August 2018
Gross international reserves stood at US$ 2.9bn in August 2018, almost unchanged y/y despite the NBG’s US$ 17.5mn purchase on FX auction. The change in reserves is attributed to government FX operations and/or asset revaluation.
NBG keeps monetary policy rate unchanged at 7.0%
At its meeting on 5 September 2018, NBG’s monetary policy committee decided to keep its key rate unchanged at 7.0%. Annual inflation was 3.1% in August, slightly above the 3.0% target. The decision takes into account the increased macroeconomic risks due to high volatility on regional financial markets, however the committee does not expect a significant deviation of inflation from its target throughout 2018 if risks realize. The next committee meeting is scheduled for 24 October 2018.
