„We forecast average annual inflation at 3.7% in 2025“ - Galt&Taggart weekly review reads.
In Mar-25, annual inflation in Georgia rose to 3.5% y/y, up from 2.4% y/y in the previous month. This increase was mainly driven by a further rise in domestic inflation to 4.0% y/y in Mar-25 (up from 3.0% y/y in Feb-25), along with a 5.7% y/y rise in mixed goods inflation (up from 3.1% y/y in Feb-25).
Meanwhile, imported inflation was just 0.2% y/y in March (down from 0.5% y/y in Feb-25). Notably, core inflation, excluding volatile food, energy and tobacco prices, increased to 2.4% y/y in Mar-25, following a 2.0% posted in previous month.
By categories, annual inflation in Mar-25 was largely driven by price increases in food and non-alcoholic beverages (+6.6% y/y, +2.20ppts), healthcare (+8.8% y/y, +0.74ppts), alcoholic beverages & tobacco (+4.2% y/y, +0.28ppts), education (+4.9% y/y, +0.25ppts) and hotels & restaurants (+6.6% y/y, +0.22ppts) categories. In contrast, as in the previous month, the communication category recorded a deflation of -12.4% y/y (contributing -0.46ppts to overall inflation), followed by furnishings, household equipment and maintenance (-2.1% y/y, -0.12ppts) in Mar-25.
On a monthly basis, there was a 1.1% y/y inflation in Mar-25, mainly due to rising prices in food and non-alcoholic beverages (+2.8% m/m, +0.93ppts) and healthcare (+1.7% m/m, +0.15ppts) categories.
We forecast average annual inflation at 3.7% in 2025.
