- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 8%
The Monetary Policy Committee of the National Bank of Georgia (NBG) left the refinancing rate at 8.0 percent on 11 February 2026, judging that a “moderately tight” stance remains appropriate as headline inflation of 4.8 percent in January—driven mainly by higher global food and other commodity prices and some domestic one-offs—should start easing, while core inflation at 2.1 percent points to anchored expectations and demand pressures are abating. The rate has been held at 8 percent since at least January 2025. The NBG projects inflation to average 3.7 percent in 2026 and to converge to the 3 percent target from the second quarter, alongside GDP growth slowing toward its long-term rate at a projected 5 percent and credit activity remaining near equilibrium. External price shocks, especially from any escalation in global geopolitics, pose the main upside risk, while a weaker US dollar and lower oil prices could pull inflation down. The Committee reiterated that further policy moves will depend on incoming data; it will only begin easing once one-off factors fade and stands ready to maintain or tighten the stance should inflation prove more persistent.
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.