The National Bank of Georgia (NBG) has raised its inflation forecasts for 2026-2027 due to ongoing risks of imported inflation and restrictions on oil supplies from the Middle East, the NBG said in its quarterly monetary policy report.
Despite a less inflationary economic growth outlook, a protracted period of global supply shocks is preventing inflation from return to its target level. In the central scenario, short-term inflation dynamics are determined mainly by ongoing constraints on oil supplies from the Middle East until the end of the year, the report says.
In view of these factors, the average annual inflation forecast for 2026 has been raised from 5.2% to 5.4%, and the 2027 forecast to 3.5% from 2.7%. The regulator thinks inflation will begin to slow in the second quarter of next year.
The NBG on October 21 again decided to keep its refinancing rate, which it had hiked in early May, at 8.25% per annum.
