2026-10-26 · Georgia News
The policy rate held at 8.25%, and the inflation forecast went up
The National Bank of Georgia's Monetary Policy Committee left the refinancing rate unchanged at 8.25% on 21 October. Annual headline inflation was 5.6% in September, with about two percentage points of it coming from energy prices; core inflation was 3.5% and services 3.7%. The bank raised its 2026 inflation forecast by 0.2 points to 5.4% and lifted its 2026 growth forecast from 6.5% to 7.2%. The next meeting is 16 December.
What the committee decided
The rate stays at 8.25% and the stance is described as moderately tight. The committee was explicit about what would change its mind in either direction: if a prolonged supply shock pushes inflation expectations up, it will keep raising the rate moderately, and once the inflationary shock fades it will begin normalising policy gradually. That is guidance in both directions, and neither of them is a cut soon.
Where the inflation is coming from
September's 5.6% sits well above the 3% target, but the composition is the argument. Roughly two of those percentage points came from energy prices. Core inflation at 3.5% and services inflation at 3.7% are both below the headline figure, which the bank reads as a sign that the shock has not yet spread broadly into domestic pricing. If those two measures start climbing toward the headline, the reading changes.
What it means if you are borrowing
The refinancing rate is the anchor for lari lending, so a hold holds the floor under lari mortgage pricing rather than lowering it. Dollar borrowing is priced off other curves and moves for other reasons. For anyone weighing a lari loan against a dollar one, the bank's guidance is the more useful part of the announcement: no easing until the shock passes, and a further moderate rise is on the table if expectations drift.
The growth number is the surprise
Alongside the hold, the bank lifted its 2026 growth forecast from 6.5% to 7.2%, and expects around 5.5% in 2027. Inflation is seen converging toward the 3% target from the second half of 2027, averaging 3.5% that year. Planning against a seven per cent economy with inflation at 5.4% and a rate that is not coming down this year is a different exercise from planning against a cooling one.
#nbg #interest-rates #inflation #lari
Written by us from the source linked above, not investment, legal or tax advice. Figures and rules change — confirm anything that matters before acting on it.
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