The National Bank of Georgia left its key policy rate unchanged at 8.25% at its June 2026 meeting. Headline inflation rose to 5.7% in May, well above the central bank’s 3% target, mainly due to higher energy prices and ongoing supply chain disruptions. Inflation is expected to remain elevated through the second quarter and to average 4.9% in 2026.
Economic activity remains strong, with output expanding by 6.2% in April and averaging 8.3% growth overall. However, heightened global uncertainty continues to weigh on the outlook. A further escalation of geopolitical tensions would likely push commodity prices higher and keep inflation above target for a more prolonged period. By contrast, stable commodity prices would support a faster easing of inflationary pressures.
Future policy decisions will take into account the evolution of geopolitical risks. In the event of a protracted conflict and sustained tensions, the current moderate stance is likely to be maintained. If tensions subside and conditions normalize, the policy stance may be adjusted accordingly.
