Georgia's inflation rises to 5.9% in October: Transportation costs increase by 21.9%

Inflation in Georgia stood at 5.9% in October, compared with the same month a year earlier. This was reported by the Georgian National Statistics Office (Geostat) on November 3. In September, the rate was 5.6%. Compared to the previous month, consumer prices rose by 0.9%. Core inflation reached 4%, or 3.9% excluding tobacco. The National Bank of Georgia (NBG)’s inflation target is 3%.

Transportation Drives Inflation in Georgia

Prices in the transportation sector rose by 21.9% year-over-year. Geostat notes: “Prices in this group rose by 21.9% and contributed 2.54 percentage points to the overall index.” The quote has been translated from English. Transportation thus accounts for nearly half of the inflation. The cost of operating private vehicles rose by 30.3%, while transportation services increased by 14.5%. The cost of purchasing vehicles rose by only 1.7%.

Geostat does not cite a cause. On October 21, the NBG pointed to energy prices: they accounted for about 2 percentage points of inflation. Tensions in the Middle East persisted longer than expected, the National Bank wrote.

Housing, water, electricity, and gas rose by 10.1% and contributed 0.98 percentage points. Rents rose by 12.8%, a finding consistent with rising new-construction prices in Tbilisi. Healthcare costs increased by 8.4%, while restaurants and hotels rose by 7.3%.

Food and non-alcoholic beverages rose by 3.1% and contributed 1.07 percentage points. Fish prices rose by 20.2%, meat by 7.6%, and oils and fats by 7%. Education, on the other hand, became 12% cheaper as prices for higher education fell by 32.9%. On a month-over-month basis, clothing and shoes stood out: they cost 10.6% more than in September. Food prices remained unchanged from the previous month.

National Bank Holds Key Interest Rate at 8.25%

On October 21, the NBG left the key interest rate at 8.25%. It had raised the rate from 8% in May. The rate is 2.35 percentage points above the inflation rate. The next meeting is scheduled for December 16.

The Monetary Policy Committee justified its decision on October 21 as follows: “The deviation of inflation from the 3% target in Georgia continues to be largely attributable to exogenous factors.” The quote was translated from English and predates the October data. The NBG raised its inflation forecast for 2026 by 0.2 percentage points to 5.4%. Starting in the second half of 2027, the rate is expected to approach the target; the NBG then expects an annual average of 3.5%.

The economy is performing strongly. The NBG raised its growth forecast for 2026 from 6.5% to 7.2%. This is consistent with the fact that Georgia’s economy grew by 6.3% in August and Georgian exports increased by 19.6%.

What this means for German companies

German exporters are entering a Georgian economy that, according to the NBG forecast, will grow by 7.2% in 2026. However, household purchasing power is being eroded by higher costs for transportation, rent, and energy. Companies arranging transportation within the country are paying 14.5% more for transportation services than they did a year ago. Supply contracts should include freight and fuel clauses.

Investors face high financing costs in lari, with a key interest rate of 8.25%. The NBG describes its monetary policy as moderately tight. Inflation is nearly twice the target. Anyone planning to take out loans in lari should factor in current interest rate levels.

Sources: Geostat, Inflation Rate in Georgia, October 2026 (EN); National Bank of Georgia, Interest Rate Decision and Monetary Policy Report of October 21, 2026 (EN)

SK, Frankfurt