- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 8%
The Monetary Policy Committee of the National Bank of Georgia on 17 December 2025 left the refinancing rate at 8.0 percent, judging the prevailing “moderately tight” stance appropriate as headline inflation has begun to ease to 4.8 percent in November while core and services inflation (2.3 percent and 2.6 percent, respectively) remain near the 3 percent target, and domestic demand is edging back toward potential. The rate has been unchanged at 8 percent since January 2025. Under its central scenario the NBG sees inflation averaging 4 percent in 2025 and converging toward the 3 percent target from Q2 2026, but it highlights greater upside than downside risks, chiefly the prospect that persistent food and higher international commodity prices—especially oil amid worsening geopolitics and rising economic fragmentation—could lift expectations and necessitate tighter policy. Conversely, a weaker USD, softer global food prices and labour-market conditions could justify a lower path. The Committee signalled that further easing will wait until one-off factors fade and inflation is on track to the target, and it is prepared to keep the current stance for longer or tighten if price pressures prove more durable; the next policy meeting is set for 11 February 2026.
Rate evolution
From June 2025 to September 2026, the National Bank of Georgia kept the policy rate at 8.0% for most of the period before raising it by 25 basis points to 8.25% in May 2026 as external inflation shocks intensified, and it left the rate unchanged on June 17, July 29 and September 9. It judged a moderately tight stance appropriate because inflation remained above the 3% target, with headline inflation at 5.6% in August as energy and international food price pressures persisted, while core inflation stood at 3.6% and services inflation at 4.4%, suggesting a moderate impact on inflation expectations. Economic activity remained strong, with growth at 8.0% in July and averaging 7.9% in the first seven months of 2026, while high-productivity sectors partly offset demand-driven inflationary pressures.
Risks were initially framed as two-sided, with upside threats from tariffs, tensions in the Middle East, oil prices and supply disruptions offset by a weak U.S. dollar, lower imported inflation, productivity gains and labour-market disinflation, but from late 2025 the National Bank of Georgia said upside risks were more pronounced. After Strait of Hormuz disruptions shifted the outlook into a high-inflation risk scenario in March 2026, it tightened in May and subsequently held the rate as renewed Middle East tensions increased uncertainty over energy supplies and raised the risk that prolonged supply shocks would affect inflation expectations and amplify second-round effects. Its central scenario projected average annual inflation of around 5.2% in 2026 and a gradual return to the 3% target over the medium term, while the National Bank of Georgia signalled further moderate increases if inflation expectations rose and gradual policy normalization once the inflationary shock dissipated.