‘Maximum’ inflation figure to be introduced
By M. Alkhazashvili
(Translated by Diana Dundua)
(Translated by Diana Dundua)
Tuesday, January 15
Inflation has been a hot topic in Georgia ever since the International Monetary Fund warned the government in summer 2006 that the season’s 14.5 percent inflation “posed a serious risk to macroeconomic stability.” Since then, official inflation figures have been considerably lower, although independent economists question their veracity.
According to the Statistics Department, inflation in 2007 was 11 percent, though the economist Demur Giorkhelidze argues the real figure was more like 18–20 percent, according to the newspaper Rezonansi.
The 2008 state budget accounts for eight percent inflation this year, however Lado Papava—an independent MP and former economy minister—says a more accurate forecast is 30–40 percent.
“If the statistics remain controlled by the government this method [of publishing inaccurate inflation figures] will continue. They will always say inflation is at eight percent,” the newspaper Akhali Taoba quotes Papava as saying.
However, from 2009 the government plans to stipulate a maximum inflation figure of 12 percent, which if exceeded will result in the forced resignation of the president of the National Bank of Georgia (NBG). If the inflation figure exceeds the target of 7–9 percent in the first three quarters of 2008, then the NBG president will be required to answer to parliament.
“Taking personal responsibility is very important if the NGB president is to control inflation processes,” the newspaper Rezonansi quoted State Minister for Reforms Coordination Kakha Bendukidze as saying.
According to the Statistics Department, inflation in 2007 was 11 percent, though the economist Demur Giorkhelidze argues the real figure was more like 18–20 percent, according to the newspaper Rezonansi.
The 2008 state budget accounts for eight percent inflation this year, however Lado Papava—an independent MP and former economy minister—says a more accurate forecast is 30–40 percent.
“If the statistics remain controlled by the government this method [of publishing inaccurate inflation figures] will continue. They will always say inflation is at eight percent,” the newspaper Akhali Taoba quotes Papava as saying.
However, from 2009 the government plans to stipulate a maximum inflation figure of 12 percent, which if exceeded will result in the forced resignation of the president of the National Bank of Georgia (NBG). If the inflation figure exceeds the target of 7–9 percent in the first three quarters of 2008, then the NBG president will be required to answer to parliament.
“Taking personal responsibility is very important if the NGB president is to control inflation processes,” the newspaper Rezonansi quoted State Minister for Reforms Coordination Kakha Bendukidze as saying.