Georgia’s annual inflation rate would have stood at 6.3% in September instead of 5.6% if the impact of free tuition at state universities were excluded, according to TBC Capital’s latest macroeconomic review. Since 2026, the government has fully covered tuition fees for first-year students at public universities, while first-year students at private universities are no longer eligible for state funding.
TBC Capital estimates that without the one-off effect of reduced higher education costs, core inflation would have reached 5.1% instead of 3.7%, while services inflation would have stood at 6.6%, rather than 3.7%. The report notes that most underlying inflation indicators are at their highest levels since early 2023, with rising service costs increasing the risk of persistently high inflation.
Meanwhile, price growth for goods, including food, is slowing and helping to contain overall inflation. Taking these factors into account, TBC Capital has revised its 2026 year-end inflation forecast down from 6.0% to 5.7%. However, continued increases in oil prices could push inflation above expectations. The bank expects annual inflation to decline in October-November before rising again in December due to base effects.
Under the new university funding system, the government fully covers tuition for the first two semesters at state universities. From the third semester, half of the funding becomes merit-based, requiring students to earn at least 80% of the credits in a full 30-ECTS semester workload to retain this support.
