National Bank of Georgia holds policy rate at 8.25%, lifts 2026 inflation forecast to 5.4%

What happened

On 21 October 2026 the Monetary Policy Committee of the National Bank of Georgia (NBG) kept the monetary policy rate unchanged at 8.25%. The committee also left the rate at 8.25% at its previous meeting on 9 September 2026.

The bank said geopolitical tensions in the Middle East have persisted longer than anticipated, prolonging the supply-side shock, while disruptions to shipping and higher energy prices are increasing production and transportation costs.

The numbers

• Annual inflation was 5.6% in September 2026, against the NBG target of 3%; the bank attributes approximately 2 percentage points of it to energy prices. In August headline inflation was also 5.6%.
• Core inflation stood at 3.5% and services inflation at 3.7% in September, against 3.6% and 4.4% respectively in August. Because both remain below headline inflation, the bank assesses the effect of the shock on inflation expectations as moderate at this stage.
• The central inflation forecast for 2026 was raised by 0.2 percentage points to 5.4%; in September the bank projected around 5.2%. Inflation is expected to converge toward the target from the second half of 2027, averaging 3.5% that year.
• According to preliminary data, the economy grew by 6.3% in August 2026 and by 7.6% on average over the first eight months. The 2026 growth projection was revised up from 6.5% to 7.2%; growth in 2027 is expected around 5.5%.

What it means for investors

The decision leaves the policy rate unchanged with no signal of a cut: the bank says it will begin to normalise its stance gradually only once the inflationary shock dissipates. For investors planning lari financing for a property or business project, the conservative reading is that the policy rate stays at 8.25% at least until the December meeting. The bank attributes the stronger growth largely to high-productivity sectors, which it says offset demand-side inflationary pressures. With inflation at 5.6%, a fixed lari yield is worth less in real terms. The banking and currency rules that apply to foreign investors are summarised on our page /rules/banking-fx.

What remains uncertain

The NBG weighed two risk scenarios. In the high-inflation one, a further escalation in the Middle East would push energy prices higher and require further tightening. In the low-inflation one, de-escalation and lasting growth would support the lari and allow a faster normalisation. The bank stated that if inflation expectations trend upward it will continue to raise the rate moderately.

What to watch next

The next data points are Geostat's rapid growth estimate for September and its consumer price index for October 2026. The next Monetary Policy Committee meeting is on 16 December 2026.

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