The FINANCIAL — Georgian CPI slowed to 2.0% m/m in October from 3.1% in September, and annual inflation decelerated to 9.6% from 9.8% in September.
"Growth continued to be led by food prices, which added 4.1% m/m in October after September’s 7.5%. Giorgi Iremashvili, Equity Research Analyst at BG Capital: Incorporating the rapid food-driven inflation of the last two months, we revise our 2010E CPI forecast upwards to 9.5% from 8.5%. Last month’s notable deceleration in food prices implies the shock in world grain markets has largely run its course in Georgia, and we see monthly food inflation decelerating through to the year end. Two other factors that will help harness inflation are the NBG’s restrictive monetary policy and the lari’s appreciation (up 3% vs. the US$ since October 1). We expect inflation will slow to 5.8% by end-2011 as the effects of the weaker-than-expected 2010 grain harvest wear out," BG Capital informs.
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