National Bank of Georgia leaves key policy rate unchanged at 8.25% as inflation outlook worsens
Georgia's central bank kept rates steady in July 2026, citing higher energy-driven inflation, solid economic activity and risks of second-round price pressures linked to Middle East tensions.
The National Bank of Georgia kept its key policy rate unchanged at 8.25% at its July 2026 meeting, maintaining a cautious stance as higher energy prices linked to tensions in the Middle East pushed inflation higher. Headline inflation rose to 5.8% in June from 5.7%, a move policymakers said was broadly in line with second-quarter expectations, while warning that second-round effects remain a key risk. Economic activity strengthened, with first-quarter growth accelerating to 9.0% year on year from 6.7% in the previous quarter, led by service sectors. The central bank said the conflict's negative impact on the economy has so far remained limited. The bank kept its 2026 economic growth forecast at 6.5% but raised its average inflation projection to 5.2% from 4.9%. It expects inflationary pressures to begin easing in the second half of the year and to gradually converge to target over the medium term. Future rate decisions will depend on inflation risks and any second-round effects.
- policy rate: The benchmark interest rate a central bank sets to influence borrowing costs, demand and inflation.
- second-round effects: Broader inflation pressures that spread through the economy after an initial price shock, such as higher energy costs feeding into wages and other prices.