«Galt & Taggart» forecasts that the National Bank will keep its monetary policy unchanged this year and will only begin to reduce the refinancing rate starting in the second quarter of next year.
In the words of Lasha Kavtaradze, analyst at Galt & Taggart , this was caused by a lower than planned inflation in 2026.
The National Bank's decision aligns with our expectations. The monetary policy will remain at 8% until the year's end. As observed, since March, the average annual inflation has stayed above the target. Additionally, the inflation rate has been rising month by month, with prices increasing by 4.6% in August. This is significant. It's also important to highlight that core inflation has accelerated notably. The overall inflation is primarily driven by a 10% increase in the prices of food and non-alcoholic beverages, followed by healthcare, hotels, and restaurants, among others. This presents a valid reason for caution. Furthermore, there are both internal and external risks to consider. In this context, it is advisable to maintain the observation regime,”, - notes Lasha Kavtaradze.
In his words, a shift in monetary policy could occur in the second quarter of next year.
We anticipate that average inflation will remain below the target, allowing the National Bank to lower the refinancing rate by 0.25 to 0.5 percentage points in 2026," Lasha Kavtaradze points out.
As a reminder, Monetary Policy Committee of the National Bank of Georgia has kept the monetary policy rate steady at 8%. The regulator last adjusted the refinancing rate to 8% on 22 May 2024. Since then, this marks the eleventh meeting of the Monetary Policy Committee, during which the refinancing rate remained unchanged. The next meeting of the Monetary Policy Committee is scheduled for 5 November 2025.
