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Inflation will gradually ease towards 3.5% in 2027 if Middle East tensions subside - Natia Turnava

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“Georgia’s annual inflation is projected to average 5.4 per cent this year before easing to 3.5 per cent in 2027, provided Middle East geopolitical tensions cool and energy market pressures gradually dissipate in the coming months,” National Bank of Georgia (NBG) Governor Natia Turnava has told MPs.

Presenting the draft Main Directions of Monetary and Exchange Rate Policy for 2027–2029 to the parliamentary Finance and Budget Committee, Turnava explained that under the central bank’s updated baseline scenario, consumer price growth will begin slowing next year and converge toward the 3 per cent target by the second half of 2027.

However, Turnava warned that the outlook hinges on global energy prices, with baseline forecasts assuming regional conflict will subside.

“Uncertainty around external factors remains elevated, and upside risks to inflation stay acute,” Turnava stated, reinforcing the central bank’s vigilance. “If external supply shocks spill over into domestic pricing expectations and amplify second-round risks, the central bank stands ready to implement additional monetary tightening.”

“Our priority is to ensure that once external shocks run their course, inflation reverts swiftly to our target,” Turnava added.

She noted that once inflation is firmly on track toward the 3 per cent target, the central bank will have leeway to ease policy rates back to neutral.

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Ani Liparteliani Author

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image NBG President meets IMF mission

10.11.2026.20:48

The International Monetary Fund (IMF) mission has begun its working visit to Georgia. The mission members, led by Alejandro Hajdenberg, met with Natia Turnava, President of the National Bank of Georgia (NBG).

According to the NBG, during the meeting, the parties discussed Georgia’s economic development trends, inflation dynamics, monetary policy, the state of the external sector, and financial sector stability. Particular attention was paid to the global economic environment and the impact of geopolitical developments on the Georgian economy.

Natia Turnava briefed the mission members on the country’s macroeconomic situation and key economic indicators. She highlighted the growth in international reserves, which have reached a historic high of USD 8.25 billion. The positive dynamics in the external sector were also discussed. In 2025, the current account deficit declined to a historic low of 2.9% of GDP, while in the first half of 2026, according to preliminary data, it stood at 2.5% of GDP.

Natia Turnava also reviewed the latest inflation trends. She noted that annual inflation stood at 5.9% in October 2026. The increase in inflation is primarily driven by geopolitical factors, particularly higher energy prices, which continue to make a significant contribution to inflation. The NBG maintains a tight monetary policy stance and stands ready to take appropriate action, if necessary, in light of inflationary risks.

The macroeconomic situation in Georgia, the country’s fiscal and monetary policies, and economic development prospects will be assessed as part of the IMF mission.

NBG Vice Presidents Ekaterine Mikabadze and Nino Jeladze, Executive Director Beka Dotchviri, IMF Resident Representative in Georgia Andrew Jewell, and heads of departments of the NBG attended the meeting.

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