Georgian Inflation Soars to 12.8% After Russia Conflict

TBILISI, Georgia — Georgian inflation accelerated to 12.8 percent in August, the fastest pace in two years, after a conflict with Russia disrupted supplies and forced tens of thousands of people to abandon their homes.

The inflation rate increased from an annual 9.8 percent in July, the central bank reported on its web site Friday. Consumer prices rose 3.4 percent from the month before, central bank spokesman Giorgi Kalandadze said.

The United States on Sept. 3 pledged $1 billion for Georgian reconstruction and humanitarian aid. The International Monetary Fund agreed to lend Georgia $750 million to help it replenish its foreign currency reserves after the conflict with Russia.

The economy suffered more than $1 billion in damage during the war, Prime Minister Lado Gurgenidze said. Growth is likely to slow in the second half to 5 percent or 6 percent and the country is "still hoping to see single-digit inflation,'' said David Owen, head of the IMF delegation that visited Georgia this month. " Things are getting back to normal quite quickly and the national bank is strongly committed to achieve its target of 8 percent'' inflation, Owen said.