TBC Capital has slightly lowered its inflation forecast for the end of 2026, from 6% to 5.7%, according to its latest macroeconomic update.
The revision reflects the impact of lower higher education fees, following changes to the state funding system for public universities, which is expected to outweigh additional inflationary pressure from oil and food prices. Annual inflation is forecast to ease in October and November before rising again in December due to base effects.
Services remain the main concern regarding the persistence of inflationary pressure, as service prices are closely tied to domestic economic conditions and tend to rise more persistently. Excluding administratively regulated prices and education, service price growth has reached its highest level since 2023, particularly in rents and medical services. Even when these two categories are excluded, growth remains elevated.
Oil and food prices remain the key near-term factors. Brent crude traded above $100 per barrel in October amid heightened geopolitical risks, despite signs of recovering supply from the Middle East. Rising oil prices are adding to domestic inflationary pressure, with fuel prices increasing further at major retail chains during October. Meanwhile, global food prices reached their highest level since late 2022 in September, although annual food inflation in Georgia slowed from an average of 8.4% in 2025 to 3.6% in September, with fruit and vegetable prices falling. TBC Capital warns that persistently high oil prices and a renewed acceleration in food prices remain key upside risks to its inflation forecast.
