National Bank of Georgia holds refi rate at 8.25%

TBILISI. July 29 (Interfax) - The National Bank of Georgia's Monetary Policy Committee has again decided to hold the monetary policy or refinancing rate at 8.25% per annum, the NBG said in a press release

"Based on its assessment of the current macroeconomic environment, the updated scenarios, and the balance of risks, the MPC considered it appropriate at this stage to keep the monetary policy rate unchanged. However, given the elevated inflationary risks, the tightened monetary policy stance is expected to be maintained for an extended period," the NBG said.

The regulator also raised its 2026 inflation forecast to 5.2% from 4.9%. "The prolonged conflict [in the Middle East] has heightened the risk of indirect inflationary effects stemming from higher energy prices. The risks of strengthening second-round effects remain a noteworthy factor," the NBG said.

Annual inflation stood at 5.8% in June, and is expected to slow in the second half of the year.

The NBG said Georgia's economic growth remains resilient in the face of external shocks, with GDP growing by 7.8% from January to May. The adverse impact of the ongoing conflict in the Middle East on external demand has remained limited. Accordingly, under the updated central scenario, the forecast for Georgia's economic growth in 2026 remains unchanged at 6.5%.

The key inflationary risks include the possibility of further increases in energy prices on international commodity markets and the expected rise in global food prices.

The monetary policy response aims to ensure that, once the supply-side inflationary shock dissipates, inflation returns to the 3% in a timely manner.

The Monetary Policy Committee will hold its next meeting on September 9.

The NBG held the policy rate at 8.25% on June 17 also. It had hiked it a quarter percent from 8% on May 6 as inflation accelerated due to the higher cost of imported fuel amid the Middle East crisis. The rate had been 8% since June 19, 2024.