The National Bank of Georgia has signaled that it is prepared to tighten monetary policy if inflationary pressures intensifyas rising geopolitical risks continue to shape the global economic outlook.
Governor Natia Turnava said the central bank is currently in a ‘waiting mode,’ closely monitoring developments and ready to adjust its policy stance as needed. She made the remarks during a joint press briefing with representatives of the International Monetary Fund.
The central bank stated that inflation dynamics have remained relatively stable in recent years. Average inflation in 2023–2024 stood at 1.1%, below the bank’s 3% target rate. While inflation was expected to temporarily exceed target levels in 2025 due to base effects and one-off factors, it was projected to gradually return to target by late 2025.
As of March 2026, annual inflation reached 4.3%, while core inflation, excluding volatile components, stood at 2.4%, remaining below the target threshold.
Turnava mentioned increasing external risks, particularly those related to the Middle East conflict which have contributed to volatility in global oil prices.
Uncertainty over the duration of the conflict and potential disruptions in energy supply chains could translate into higher inflation through increased transport and production costs. The ongoing Russia-Ukraine war also continues to influence regional economic conditions.
The central bank’s main instrument for managing inflation remains the policy interest rate, currently set at 8%, which Turnava described as above the neutral level, indicating a relatively tight monetary stance.
The regulator has also developed internal scenarios to assess the potential impact of oil price fluctuations and other external shocks, ensuring preparedness for different outcomes.
