NBG’s Turnava: Inflation will gradually ease towards 3.5% in 2027 if Middle East tensions subside

“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.