The National Bank of Georgia’s Monetary Policy Committee held the monetary policy rate at 8.25%, maintaining a moderately tight stance as supply-side inflation pressures persist despite moderate effects on inflation expectations. The rate had been held at 8% before a 25-basis-point increase in May and has remained at 8.25% since. Headline inflation was 5.6% in August, driven largely by higher energy prices and intensifying international food-price pressures, while average inflation is projected at around 5.2% in 2026 before gradually converging to the 3% target over the medium term. Economic growth remained strong, averaging 7.9% in the first seven months, with high-productivity sectors partly offsetting demand-side inflation pressures. Renewed Middle East tensions have increased uncertainty over energy supplies and international price volatility, raising the risk that prolonged shocks generate second-round effects. The committee signalled moderate further rate increases if supply shocks lift inflation expectations, followed by gradual policy normalization once the inflationary shock dissipates.
National Bank of Georgia Holds Policy Rate at 8.25%
The National Bank of Georgia held its monetary policy rate at 8.25%, maintaining a moderately tight stance amid persistent supply-side inflation pressures. It signalled moderate further increases if supply shocks raise inflation expectations, followed by gradual normalization once the shock dissipates.