National Bank of Georgia Leaves Key Interest Rate Unchanged
The National Bank of Georgia kept its key monetary policy rate unchanged at 8.25% during its June 2026 meeting. The decision reflects the central bank’s cautious approach as inflation remains above target while the economy continues to show strong growth.
Inflation Remains Above Central Bank Target
Georgia’s headline inflation rose to 5.7% in May, standing well above the central bank’s official 3% target. The increase was mainly driven by higher energy costs and continued disruptions in supply chains.
Inflation is expected to stay elevated throughout the second quarter of the year. For 2026, average inflation is projected at around 4.9%, suggesting that price pressures may take time to ease fully.
Strong Economic Growth Continues
Despite inflation concerns, Georgia’s economy remains resilient. Economic activity expanded by 6.2% in April, while overall growth has averaged 8.3%. This strong performance shows that domestic activity remains solid, even as external risks continue to weigh on the outlook.
Global Uncertainty Remains a Key Risk
The central bank continues to monitor global conditions closely. Ongoing uncertainty, especially around geopolitical tensions, could affect inflation and economic stability.
If geopolitical conflicts intensify, commodity prices may rise further. That would likely keep inflation above the target for a longer period and could force policymakers to maintain a tighter monetary stance.
On the other hand, if commodity prices remain stable, inflationary pressure could ease more quickly, giving the central bank more room to normalize policy over time.
Future Policy Outlook
Future decisions by the National Bank of Georgia will depend heavily on geopolitical developments, inflation trends, and commodity price movements. If tensions remain high or conflicts continue, the bank may keep policy restrictive. However, if global conditions improve and inflation slows, monetary policy could gradually move toward normalization.
The National Bank of Georgia’s decision to hold the policy rate at 8.25% shows its focus on controlling inflation while supporting economic stability. With inflation still above target and global risks uncertain, policymakers are likely to remain cautious in the months ahead.