National Bank of Georgia Holds Key Rate Steady

2026-07-29 08:19 By Larissa Caser 1 min. read

The National Bank of Georgia left its key policy rate unchanged at 8.25% at its July 2026 meeting, maintaining a cautious stance amid tensions in the Middle East.

Headline inflation edged up to 5.8% in June from 5.7%, driven by higher energy prices linked to the regional conflict.

Policymakers noted the increase was broadly in line with expectations for the second quarter, while emphasizing that second-round inflationary effects remain a key concern.

Meanwhile, economic activity accelerated to 9.0% year-on-year in the first quarter from 6.7% in the previous quarter, supported by strong performance in service sectors, with the negative impact of the conflict remaining limited.

The central bank continues to forecast economic growth of 6.5% in 2026 and revised its average inflation projection up to 5.2% from 4.9%, beginning to ease in the second half of the year and gradually converge to target over the medium term.

Future decisions will depend on inflation risks and second-round effects.



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National Bank of Georgia Holds Key Rate Steady
The National Bank of Georgia left its key policy rate unchanged at 8.25% at its July 2026 meeting, maintaining a cautious stance amid tensions in the Middle East. Headline inflation edged up to 5.8% in June from 5.7%, driven by higher energy prices linked to the regional conflict. Policymakers noted the increase was broadly in line with expectations for the second quarter, while emphasizing that second-round inflationary effects remain a key concern. Meanwhile, economic activity accelerated to 9.0% year-on-year in the first quarter from 6.7% in the previous quarter, supported by strong performance in service sectors, with the negative impact of the conflict remaining limited. The central bank continues to forecast economic growth of 6.5% in 2026 and revised its average inflation projection up to 5.2% from 4.9%, beginning to ease in the second half of the year and gradually converge to target over the medium term. Future decisions will depend on inflation risks and second-round effects.
2026-07-29
National Bank of Georgia Keeps Key Rate Unchanged
The National Bank of Georgia held its key policy rate steady at 8.25% during its June 2026 meeting, noting global uncertainty despite signs of improved sentiment. Headline inflation increased to 5.7% in May, significantly above the central bank’s target of 3%, primarily driven by higher energy prices and ongoing supply chain disruptions. Inflation is expected to remain elevated during the second quarter of the year, averaging 4.9% in 2026. Economic activity remains robust, expanding by 6.2% in April and averaging 8.3% growth overall. However, global uncertainty continues to pose risks to the outlook. An escalation of geopolitical tensions would likely drive commodity prices higher, keeping inflation above target for a longer period. Conversely, stable commodity prices contribute to a faster moderation of inflationary pressures. Future decisions will regard current geopolitical tensions, continuing to moderate in case of prolonged conflict and normalization may proceed if tensions ease.
2026-06-17
Georgia Hikes Policy Rate to 8.25%
The National Bank of Georgia lifted its key policy rate by 25 bps to 8.25% at its April 2026 meeting, the first hike since March 2022, taking borrowing costs to their highest level since 2024. Policymakers said the decision is aimed at maintaining inflation expectations stable at the target rate in the face of a supply-side shock from the Middle East conflict. They added that the moderate tightening of monetary policy should also help reduce the risk of second-round effects and ensure inflation returns quickly to the 3% target once the shock fades. The inflation rate in Georgia quickened to 5.9% year-on-year in April 2026, the highest level since February 2023, from 4.3% in the previous month. Meanwhile, the central bank noted that the economy continues to show resilience, with growth remaining robust despite ongoing risks. According to preliminary data, economic activity grew by 10.7% in March 2026 and by 9.1% in the first quarter.
2026-05-06