In December, annual inflation continued to slow to 4.0%, while prices decreased by 0.2% compared to November, reads the report of the National Bank of Georgia (NBG).

According to the NBG, since the second half of 2025, inflation has been higher than the target of 3%, generated by food products, which in turn are due to base effects and exogenous factors.

As expected, the contribution of food and non-alcoholic beverages to inflation began to gradually decline and amounted to 3.0 percentage points in December. Over the past year, rising prices for food raw materials on international markets, along with domestic factors, have further increased food inflation, though in recent months, the food price index on the international market has been decreasing on a monthly basis.

Core inflation, which excludes the highly volatile food, energy, and tobacco prices from the consumer basket, was stable in 2025. In December, the core inflation amounted to 1.6%. “Monitoring core inflation is important for assessing the stability of relatively long-term inflation expectations,” the NBG said.

Based on the NBG report, compared to November, in December, the prices of beef and cheese in the consumer market increased, while the price of chocolate decreased. Internet taxes had the greatest impact on reducing inflation (-0.12 pp). Also, the annual decrease in prices for certain household equipment contributed to the annual inflation decline. As for inflation of locally produced products, annual inflation amounted to 6.2%.

“The increase in local inflation is largely driven by increases in the prices of bread, beef, and cheese (in total, by 3.3 percentage points). Service inflation, a key component of domestic inflation, remains below target and reached 2.5% in December,” the NBG said.