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The National Bank of Georgia (NBG) has maintained its key refinancing rate at 8.25% following a meeting of its Monetary Policy Committee (MPC) on September 9. The decision comes as the central bank monitors ongoing inflationary pressures and global economic uncertainties.
According to the NBG, annual inflation reached 5.6% in August. The bank attributed this deviation from its 3% target to supply-side shocks, specifically citing rising energy prices linked to geopolitical tensions in the Middle East and increased volatility in international food markets. Despite these factors, the bank noted that core inflation remains at 3.6% and services inflation at 4.4%, suggesting that the impact on inflation expectations has remained moderate thus far.
The NBG reported that Georgia’s economic activity remains strong, with 8% growth recorded in July. The bank stated that contributions from high-productivity sectors have helped offset inflationary pressures caused by strong aggregate demand.
Looking ahead, the central bank projects that average annual inflation will be approximately 5.2% in 2026 before gradually converging toward its 3% target over the medium term. The NBG emphasized that it considered both high- and low-inflation risk scenarios in its decision-making process. Under a high-inflation scenario, characterized by prolonged geopolitical tensions and adverse climate conditions affecting food prices, the bank indicated it would require a tighter monetary policy stance. Conversely, under a low-inflation scenario, structural economic changes and improved productive capacity could lead to a faster convergence toward the inflation target.
The NBG stated that it will continue to monitor the risk of second-round effects from supply-side shocks. The committee noted that if these shocks lead to an upward trend in inflation expectations, it will consider moderate increases to the monetary policy rate.
The next meeting of the Monetary Policy Committee is scheduled for October 21, 2026.
Article and image source: civil.ge
