TBILISI, September 16 – Inflation in Georgia is expected to creep above 5% in the coming months before cooling back to around 4.5% by the end of the year, according to new research by TBC Capital.
The report notes that inflation already hit 4.6% in August, fueled in part by rising prices for bread and imported cigarettes after an excise tax hike. Internet service costs, which had briefly fallen earlier this year, rose again by 4.6% in July, adding pressure on consumer prices, BNI reports.
TBC Capital says one-time factors that had helped push prices down in 2024 have now faded. Instead, temporary pressures are working in the opposite direction. Bread prices are expected to keep inflation higher until April, while cigarette prices will weigh on inflation until at least January.
Fuel, once a source of relief, is also no longer helping. The decline in fuel prices seen earlier this year has weakened after two straight months of increases.
Local products are seeing some of the sharpest hikes. Prices for domestically produced goods and services jumped 6.6% in August, the highest since mid-2023. Imported goods also rose slightly, with annual imported inflation reaching 0.8%.
The Georgian lari remains supported by strong foreign currency inflows. The National Bank of Georgia bought about USD 1.5 billion between March and August to bolster reserves, which stood at USD 5.2 billion by the end of August.
Foreign direct investment has slowed. In the first half of 2025, FDI totaled USD 764 million, down 15.5% year-on-year, with most inflows coming from reinvested earnings.
