National Bank of Georgia shifts monetary policy formulation to a risk-management approach from early 2025

The National Bank of Georgia outlined how it is managing macroeconomic and financial stability risks in an environment of regional conflict and heightened global uncertainty, with its president Natia Turnava highlighting a formal shift in the monetary policy process toward a risk-management approach. Turnava argued that prudent, consistent economic policy and strong economic fundamentals are key to absorbing external shocks, and that credible action to preserve price stability can reduce the risk of shocks turning into broad and persistent inflation. She noted that forward-looking policymaking has become more challenging as supply-side inflation shocks have become more frequent under high uncertainty, increasing the importance of analysing not only a baseline outlook but also likely risk scenarios. Under the National Bank of Georgia’s approach, policy decisions consider risk-scenario analysis alongside the central scenario, supported by systematic risk assessment and transparent communication of how policy would respond to different potential developments.