The National Bank of Georgia held its key policy rate steady at 8.25% during its September 2026 meeting, maintaining a moderately tight stance amid persistent inflationary risks. Annual inflation rose to 5.6% in August, largely driven by supply-side shocks, particularly higher energy prices amid renewed geopolitical tensions in the Middle East. International food price pressures also intensified, while higher energy costs raised production and transportation expenses. However, core inflation stood at 3.6% and services inflation at 4.4%, suggesting that the impact of the supply shock on inflation expectations remains moderate. The NBG projects average annual inflation at around 5.2% in 2026 before gradually converging to its 3% target over the medium term. The central bank said it could moderately raise the policy rate if prolonged supply shocks push inflation expectations higher and generate second-round effects, while normalization would begin once the inflationary shock dissipates.