The refinancing rate is expected to remain unchanged through the end of the year, according to TBC Group Chief Economist Otar Nadaraia.
Speaking on Business Course, Nadaraia said the National Bank of Georgia’s decision to keep the key rate at 8.25% was anticipated. He noted that falling oil prices are likely to support a gradual decline in inflation in the coming months, although price growth is still expected to remain above the central bank’s target.
“If the US–Iran conflict moves toward resolution and oil prices decline further, inflation will also ease. However, energy prices remain the key factor, alongside fertilizers that affect food prices. Overall, the shock is already fading,” he said.
Nadaraia added that inflation is expected to decline on a monthly basis, but annual figures will remain relatively high, likely above 5%. Based on current assumptions - Brent around $80 per barrel and the exchange rate at 2.65 GEL/USD - year-end inflation could be slightly below previous forecasts of 6%.
He concluded that, barring major external shocks, monetary policy tightening is unlikely, while a rate cut this year is considered even less probable.
