Galt & Taggart has revised its inflation outlook upward, increasing its 2026 annual forecast from 3% to 4.8%, according to economist Lasha Kavtaradze. He also expects inflation to exceed 5% in the second quarter, driven by both global and domestic factors.
Kavtaradze said the revision reflects rising inflationary pressure that became visible from April. He pointed to geopolitical tensions in Iran and higher energy prices, as well as domestic increases in electricity tariffs. In April alone, annual inflation reached 5.9%, with energy-related factors accounting for a significant share of the increase.
He explained that about 2.3 percentage points of April inflation were linked to energy costs, including fuel prices and electricity tariffs. Of this, 1.3 points were direct effects, while the rest came from indirect impacts such as higher transport and production costs.
Looking ahead, Kavtaradze expects inflation to remain above 5% in May as well, with gradual normalization later in the year if global oil prices stabilize. However, he warned that if high price levels persist longer than expected, inflation forecasts may need to be revised upward again. The National Bank will announce its latest interest rate decision following its monetary policy meeting on May 6.
