TBC Capital expects Georgia’s refinancing rate to remain unchanged at 8.25% this year, as inflation is likely to stay above the National Bank’s target level for most of 2026. The investment bank’s latest macroeconomic update says the central bank is expected to maintain a cautious monetary policy stance until inflationary pressures ease.
According to TBC Capital, annual inflation increased slightly from 5.7% to 5.8% in June. Food prices are expected to remain the main driver of inflation, although price pressures are likely to gradually weaken. The report notes that fuel prices, bread, electricity tariffs, tobacco products and internet services were among the main contributors to inflation growth in recent months.
The update also highlights risks stemming from renewed tensions between the United States and Iran. TBC Capital says that a prolonged escalation in the Middle East could increase global commodity prices and push Georgia’s inflation forecast closer to the previously expected 6% level. Rising oil prices could also slow the process of monetary policy easing.
At the same time, the bank notes that if geopolitical risks remain limited, imported inflation is expected to decline in the coming months. TBC Capital forecasts that inflation will end the year at around 5.1%, while food prices will continue to be a key factor influencing consumer prices.
