As of January 29, 2025, the National Bank of Georgia (NBG) kept its monetary policy rate unchanged at 8% during economic and political uncertainties.
Inflation remains below the target line of 3%, with a 1.9% year-over-year increase in December 2024 while the prices of domestically produced services and products, the primary marker of inflation projections, rose by 2.2%. At the same time, the average economic growth rate was 9.4% with higher potential output whereas lowered fuel prices loosened inflation-related pressure, though globally rising food prices still contributed to an overall slight increase.
Potential risk scenarios proposed by NBG:
- High-inflation risk: continuing geopolitical tensions could push inflation higher, requiring a different monetary policy.
- Low-inflation risk: De-escalation of tensions could ease inflation-related pressures and help growth.
As uncertainty calms, the policy rate is expected to gradually ease to 7%, with the next meeting on the topic scheduled for March 12, 2025.
