The National Bank of Georgia (NBG) has kept the refinancing rate unchanged at 8.25%, saying there is currently no need for further monetary policy tightening despite inflation remaining above the target level.
The NBG’s Monetary Policy Committee said annual inflation reached 5.8% in June 2026, mainly driven by higher energy prices. The bank noted that renewed geopolitical tensions in the Middle East have increased volatility in global oil markets, creating additional risks for energy prices.
At the same time, the NBG said core inflation, which excludes food, energy and tobacco prices, stood at 3.2% in June, while services inflation rose to 4.1%. The bank warned that risks of broader inflationary effects remain a concern.
The NBG’s updated forecast shows that energy prices will continue to make a significant contribution to inflation in 2026, with average annual inflation expected to reach 5.2%. The bank expects inflation to decline from the second half of the year and gradually return to the 3% target over the medium term.
The central bank also said Georgia’s economic activity remains resilient despite external shocks. Preliminary data shows the economy grew by 6.4% in May 2026, while average growth during the first five months of the year reached 7.8%.
The NBG maintained its 6.5% economic growth forecast for 2026, noting that service-oriented sectors remain the main driver of expansion.
The bank said geopolitical uncertainty remains one of the main risks for the economic outlook and considered both higher- and lower-inflation scenarios. It warned that prolonged geopolitical tensions and further increases in energy prices could push inflation above the current forecast.
However, the NBG added that stronger economic productivity, improved external balances, and lower energy prices could support faster disinflation.
“Based on the current macroeconomic environment, updated scenarios and risk assessment, the Monetary Policy Committee considered it appropriate to keep the monetary policy rate unchanged at this stage,” the NBG said.
The central bank added that it would maintain a tight monetary policy stance for an extended period and is prepared to raise rates further if inflationary risks increase.
The next meeting of the NBG’s Monetary Policy Committee is scheduled for September 9, 2026.
