NBG Keeps Key Refinancing Rate Unchanged at 8%
On May 7, the Monetary Policy Committee of the National Bank of Georgia (NBG) decided to keep the key refinancing rate unchanged at 8,0%.
In April, Geostat reported that annual inflation stood at 3.4%, which the NBG noted remains close to its 3% target. Core inflation – excluding food, energy products, and cigarettes, which are typically subject to high price volatility – was 2.3%.
According to the NBG, Georgia’s economy “remains robust in tandem with maintained price stability.” In the first quarter of 2025, real GDP growth averaged 9.3%, “driven by structural changes in the economy.” The bank noted a sustained strong contribution of productive sectors to GDP growth and emphasized the role of strong domestic demand in supporting high economic growth. It said this leaves demand-side price pressures as a key factor to monitor.
The central bank also outlined two potential risk scenarios. In a high-inflation scenario, growing uncertainty in international markets, driven by tariff policies and accelerating economic fragmentation, could fuel inflation. Conversely, under the low-inflation scenario, a continued global weakening of the U.S. dollar, combined with an appreciated exchange rate of GEL, would exert downward pressure on inflation through reduced prices of imported goods.
The next meeting of the Monetary Policy Committee is scheduled for June 18, 2025.
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