Keeping Georgia’s monetary policy rate unchanged at 8.25% represents a moderately tight monetary policy stance, driven by current inflationary trends, Tamta Sopromadze, head of the National Bank of Georgia’s Macroeconomics and Statistics Department, said.
According to Sopromadze, the NBG expects inflation to reach 5.2% in 2026, above its 3% target. Energy prices are the main contributor to inflation and the deviation from the target, largely due to the acute geopolitical situation and a sharp increase in global oil prices.
Sopromadze said a key inflationary risk would emerge if geopolitical tensions persist for an extended period, potentially triggering higher inflation expectations and second-round effects. However, she noted that core inflation stood at 3.6% in August, indicating that such effects remain moderate for now. At the same time, a low-inflation scenario remains possible if strong external inflows and structural changes seen in recent years continue for longer.
The NBG’s Monetary Policy Committee is monitoring developments and related risks, with updated forecasts planned for October. Sopromadze said the central bank is prepared to adjust monetary policy as needed so that, once the impact of external factors fades, inflation can return quickly to the 3% target.
