The National Bank of Georgia (NBG) expects global oil supply constraints, declining inventories and diesel shortages to maintain inflationary pressure until the second quarter of 2027. Its latest monetary policy report says restrictions on oil supplies from the Middle East are expected to persist through the end of 2026.
Higher transportation and insurance costs, along with elevated oil refining margins, are also expected to push up domestic fuel prices and increase production and shipping costs across other sectors. Rising global food commodity prices and adverse climate conditions pose additional inflation risks.
The NBG expects fuel inflation to begin easing from Q2 2027 as global oil market pressures weaken, petroleum product prices decline and the previous year’s high base effect takes hold. However, prolonged external shocks could also raise inflation expectations and create secondary price pressures.
On October 21, the NBG raised its 2026 inflation forecast from 5.2% to 5.4% and kept its key policy rate unchanged at 8.25%. Annual inflation reached 5.6% in September 2026, with energy prices accounting for around 2 percentage points. The bank forecasts average inflation of 3.5% in 2027, gradually approaching its 3% target in the second half of the year.
