Galt & Taggart now expects the National Bank of Georgia to keep its main refinancing rate unchanged at 8% throughout 2026, revising its earlier forecast that anticipated a modest rate cut.
The updated projection reflects rising global uncertainty, particularly linked to escalating tensions in the Middle East, including the war in Iran and disruptions in the Strait of Hormuz. The investment bank states that these developments have disrupted global supply chains and increased energy and transportation costs.
Such external pressures are expected to sustain inflationary risks, limiting the central bank’s ability to ease monetary policy in the near term.
Galt & Taggart notes that inflation forecasts had already been revised upward prior to the latest geopolitical escalation. Against this backdrop, maintaining a tight monetary stance is seen as necessary to anchor price stability.
As a result, the firm no longer expects the National Bank to implement its previously projected 0.5 percentage-point rate cut this year.
The National Bank of Georgia kept its interest rate at 8% during its most recent Monetary Policy Committee meeting on March 25. The next rate-setting meeting is scheduled for May 6 when policymakers are expected to reassess both domestic and external economic conditions.
