High inflation remains a challenge across the region, not only in Georgia, according to Galt & Taggart economist Lasha Kavtaradze. He attributed part of the pressure to the escalation of the Iran war, which has pushed up international oil prices and increased inflationary pressure in oil-importing economies.
Turkey recorded the highest inflation in the region in August at 31.5%, followed by Kazakhstan at 9.8% and Ukraine at 8.1%. Russia’s inflation stood at 6.3%, Uzbekistan’s at 6.2% and Azerbaijan’s at 5.7%. Georgia recorded 5.6%, compared with 4.8% at the beginning of the year.
Kavtaradze said inflation has slowed in Kazakhstan, Uzbekistan and Belarus, while it has risen in Ukraine, Armenia and Georgia. Armenia’s rate increased from 3.8% at the start of the year to 4.4% in August, while Belarus also recorded a lower rate compared with the beginning of 2026. He said the impact of higher oil prices has been particularly visible in Ukraine and Georgia, while the pressure has been weaker in Azerbaijan, Uzbekistan and Belarus.
According to Kavtaradze, central banks across the region have responded differently, with some easing monetary policy despite elevated inflation because real interest rates remain high. Ukraine raised its policy rate by 0.5 percentage points this year, Georgia by 0.25 points in May, and Armenia by 0.25 points in September. Kavtaradze expects oil prices to remain elevated internationally, which could prevent Georgian inflation from falling as quickly as previously forecast.
