Acting Governor of National Bank highlights Georgia's "healthy" macroeconomic environment with "increased" economic potential

Natia Turnava, the Acting Governor of the National Bank of Georgia, on Friday highlighted investments as the main driving force of economic growth in Georgia's "healthy" macroeconomic environment with "increased" economic potential.

Speaking at the conference organised by the Business Association of Georgia earlier today, Turnava said increased economic potential of the country along with the development of productive industries was a “neutralising factor” against the growth of inflation in the background of high economic growth.

Inflation has been below the target level since March last year, and has been below one percent for the last five months. This indicates that economic growth occurs at the expense of productivity growth”, she said.

The Acting Governor mentioned that maintaining the necessary flexibility in monetary policy was “still a challenge”.

The National Bank started to tighten the monetary policy faster than other countries, and that is why we are easing the monetary policy and reducing the interest rate faster than others, although with quite cautious steps”, Turnava said.

She noted the pace of monetary policy easing should be a “bit bolder”, but “quite cautious”. 

We have to be conservative, take into account all potential risks”, Turnava said.

The official said the “successful” reduction of inflation through the implementation of anti-inflationary policies was a “prime example” of how coordination in economic policy could yield “positive” results. 

She said the Government's anti-inflationary measures, such as enhancing competition in various sectors and tightening monetary policy, combined with National Bank’s efforts, resulted in a “united and effective” outcome.