National Bank of Georgia keeps refinancing rate at 8%
TBILISI. Feb 11 (Interfax) - The Monetary Policy Committee of the National Bank of Georgia (NBG) decided to keep the refinancing rate at 8% per annum (effective since June 2024) at its meeting on Wednesday amid short-term risks of an inflation increase, the NBG said in a press release.
"As of January 2026, the overall price level in Georgia increased 4.8% year-on-year. Inflation above the target level [3%] is largely driven by food inflation. Compared to the previous month, a moderate increase in core inflation raises the risks of rising inflation expectations," the NBG said.
The NBG expects inflation to slow to 3.7% by the end of the year. "The current inflation dynamics are still temporary in nature and are not causing so-called 'second-round' effects, meaning the pressure is not transferring to the prices of other goods and services. Against the backdrop of temporary factors' influence, inflation will gradually approach the target level from the second quarter of 2026 and average 3.7% for the year," it said.
The regulator also believes that economic activity in the country is gradually returning to its long-term growth rates, which mitigates demand-side pressure on prices. According to the NBG's forecast, Georgia's GDP growth in 2026 will slow to 5% from 7.5% last year.
As a negative scenario, the realization of which may require an increase in the refinancing rate, the NBG highlighted the possible increase in risks of rising long-term inflation expectations amid high GDP growth rates in the country, as well as an escalation of the geopolitical situation, due to which prices on international commodity markets may rise more than expected and be transmitted to the local market.
The possibility of lowering the rate will be considered by the NBG if economic growth causes a noticeable increase in supply on the domestic market, which could have a disinflationary effect alongside current labor market trends. Among external disinflationary factors, the regulator noted the possible prolonged weak position of the dollar alongside the downward trend in global oil prices.
"According to the central scenario, only after the current one-off factors are exhausted and inflation approaches the target level will the National Bank continue the normalization of monetary policy. However, if inflation remains above the target level for an extended period due to the impact of various one-off factors, the Monetary Policy Committee is prepared to maintain the current tight stance longer than expected, and if necessary, tighten it further," the NBG said.
The next meeting of the Monetary Policy Committee will be held on March 25, 2026.
The NBG kept the refinancing rate at 8% per annum eight times in 2025. In 2024, the regulator lowered the refinancing rate against the backdrop of slowing inflation at the beginning of the year: by 0.5 percentage points (p.p.) in January, by 0.75 p.p. in mid-March, and by 0.25 p.p. from May 22. Since June 19, 2024, the rate has been at 8%.
