As the Georgian Lari (GEL) briefly depreciated in September 2020, the National Bank of Georgia (NBG) once again became the subject of criticism for not being able to stabilize the exchange rate even though it had injected 120 million US$ into the economy. At a press conference (2020/09/16), the President of the NBG objected that the aim of the injection of US$ was not to strengthen the GEL since the NBG operated under a floating exchange rate policy. Rather, he went on to explain, the NBG’s constitutional duty was to ensure price stability on the basis of an inflation-targeting framework.

When the Georgian unemployment statistics for Quarter 2 (April, May, June) of 2020 came out, no one was surprised to see that the national unemployment rate, which had been falling steadily over the previous quarters, and even years, suddenly increased by 0.9 percentage points relative to the same quarter of 2019 (more precisely from 11.4% in Q2 2019 to 12.3% in Q2 2020). Perhaps we were more surprised by the fact that the unemployment rate did not go up more drastically in the midst of a strict lockdown, various travel restrictions, and quarantine measures.

Many of us well-remember the cold winter of 2006 when the Russian Federation cut its natural gas supply to Georgia. In general, it is clear that diversification in energy import markets reduces the risk of socio-economic shocks following political tensions with other countries. Fortunately, Georgia managed to find an alternative to the Russian supply and started importing gas from Azerbaijan. This blog will review the current gas import situation and discuss the expected trends in natural gas supply security.