Inflation expectations decreased in October, National Bank of Georgia report says

The National Bank of Georgia on Monday released its latest report on domestic inflation expectations and economic activity, revealing a decrease in inflationary expectations for October.

The findings are based on a survey conducted among participants in economic activities regarding anticipated changes in consumer prices.

According to the report, respondents indicated a decline in anticipated inflation over the next year. Specifically, fewer participants expect prices to rise in the range of four-six percent or more than eight percent compared to September.

Conversely, there has been an increase in those predicting consumer price changes within a lower interval of two-four percent.

The survey also highlighted a reduction in inflation expectations over a three-year period. Fewer participants foresee price increases between six-eight percent, while expectations of growth in the two-four percent and four-six percent categories have risen.

In terms of individual pricing strategies, respondents expect a slight uptick in the prices of their own products and services over the next year. Notably, there has been an increase in the number of businesses anticipating price hikes of six-eight percent and more, while the expectation of price changes within the four-six percent range has decreased.

In terms of wage growth expectations, a higher number of respondents anticipating salary increases between 10-20 percent compared to the previous month. However, there has been a decline in the number of those expecting salary changes in the -10-zero percent range.

Interviewees also noted a decrease in the effectiveness of resource utilisation for production. Actual use of company resources, compared to their maximum capacity, has declined from September.

The Georgian National Statistics Office earlier this month said the consumer price index increased by 0.3 percent in October compared to the previous month, while the annual inflation rate also amounted to 0.3 percent.

With regard to the annual core inflation, the prices increased by 1.2 percent, while the annual core inflation without tobacco amounted to 1.2 percent, the Office added.