National Bank of Georgia Holds Key Rate at 8%

The National Bank of Georgia maintained its policy rate at 8% during its December 2025 meeting, reflecting a measured approach amid lingering inflation pressures. Inflation slowed to 4.8% year-on-year in November, while core and service sector inflation remained near target at 2.3% and 2.6%, respectively. Rising food prices continue to influence headline inflation, though these effects are expected to be temporary. The NBG forecasts that inflation will average around 4% this year and gradually ease toward 3.5% in 2026. Economic activity is steadily returning to its long-term potential, helping to ease demand-side price pressures. Considering both upside risks from global commodity prices and geopolitical tensions and downside risks from a softer USD, falling international food prices, and domestic labor market developments, the Monetary Policy Committee deemed it appropriate to maintain a moderately tight monetary policy stance.

The National Bank of Georgia held its policy rate steady at 8% during its November 2025 meeting, signaling a cautious approach amid persistent inflationary pressures. Annual inflation climbed to 5.2% in October, the highest since March 2023, moving further above the central bank’s 3% target. Underlying inflation indicators have also remained close to the target level. The central bank expects headline inflation to average around 4% in 2025, before easing to 3.5% in 2026. Meanwhile, economic activity is gradually converging toward its long-term potential, helping reduce demand-driven price pressures, with GDP rising 7.7% in the January–September period. After assessing upside inflation risks from US tariffs and geopolitical tensions, along with domestic economic risks against downside risks from lower oil prices, a softer USD, and domestic labor market developments, the MPC deemed it appropriate to maintain a moderately tight policy stance.

The National Bank of Georgia kept its policy rate unchanged at 8% during its September 2025 meeting, maintaining a cautious stance amid inflation risks. Annual inflation rose 4.6% in August, above the 3% target, driven mainly by volatile food prices, while core inflation stayed below target at 2.8%. Service inflation reached 4.2%, but imported goods remained deflationary due to lower fuel costs. The bank projects inflation to average 3.8% in 2025 before easing to target in the medium term. Economic growth slowed toward trend, with GDP up 6.5% in July, while tighter financial conditions eased demand pressures. Policymakers noted risks from volatile US tariff policy, supply chain disruptions, and Middle East instability, which could lift inflation. Conversely, weaker global food prices and a stronger exchange rate may lower it. Balancing these scenarios, the MPC kept rates steady, signaling future moves will depend on updated forecasts and risk assessments.