10.09.202508:26:43UTC+00Georgia Holds Key Rate Steady

During its September 2025 meeting, the National Bank of Georgia decided to maintain its policy rate at 8%, reflecting a cautious approach in light of ongoing inflation concerns. Annual inflation rose to 4.6% in August, surpassing the 3% target, mainly due to fluctuating food prices. However, core inflation remained lower, at 2.8%. Service sector inflation reached 4.2%, while imported goods experienced deflation, largely because of reduced fuel costs. The bank anticipates that inflation will average 3.8% in 2025, eventually aligning with the target in the medium term. Economic growth has slowed to align with the trend, with GDP increasing by 6.5% in July, as tighter financial conditions have reduced demand pressures. Policymakers highlighted potential risks, including volatile U.S. tariff policies, supply chain disruptions, and instability in the Middle East, which could exacerbate inflation. On the other hand, declining global food prices and a stronger exchange rate might temper inflationary pressures. Evaluating these factors, the Monetary Policy Committee decided to keep rates unchanged, indicating that future rate adjustments will be contingent upon revised forecasts and risk assessments.