National Bank of Georgia expects inflation to slow to 3.5% in 2027

TBILISI. Nov 9 (Interfax) - Inflation in Georgia could slow to 3.5% in 2027 from an anticipated 5.4% this year, assuming the Middle East conflict ends, National Bank of Georgia (NBG) Governor Natia Turnava said in parliament, presenting draft monetary policy guidelines for 2027-2029.

"Georgia's annual inflation is projected to average 5.4% this year before easing to 3.5% in 2027, provided Middle East geopolitical tensions cool and energy market pressures gradually dissipate in the coming months," the be.ge news website quoted her as saying.

Turnava said that under the central bank's updated baseline scenario, consumer price growth will begin slowing next year and converge toward the 3% target by the second half of 2027.

"Anticipated inflation will depend much on global events, particularly energy prices on international markets, and the forecast assumes the situation in the Middle East will stabilize and that inflationary pressures arising from the conflict will be neutralized gradually. Uncertainty around external factors remains elevated, and upside risks to inflation stay acute," she said.

Imported inflation accounted for 2.2 percentage points of the 5.9% annual inflation rate in October, due mainly to rising prices on international oil markets amid the ongoing conflict in the Middle East, Turnava said.

She said the NBG was prepared to tighten monetary policy further if inflation risks intensify.

"Our monetary policy is tight. You know that in May we raised the [refinancing] rate by 0.25%, and it is now 8.25%. We always say that we are prepared to consider further tightening if necessary, if we see so-called second-round effects. Conversely, we are prepared to ease pressure on our monetary policy if the conflict in the Middle East is resolved and volatility in foreign markets eases," Turnava said.

Inflation in Georgia rose to 4% in 2025 from 1.9% in 2024 after falling to 0.4% in 2023 from 9.4% in 2022 and 13.9% in 2021.