Annual inflation was 2.4% in Feb-25 
In Feb-25, annual inflation in Georgia rose to 2.4% y/y, up from 2.0% y/y in the previous month. This increase was mainly driven by a rise in domestic inflation to 3.0% y/y in Feb-25 (up from 2.3% y/y in Jan-25), alongside an increase in imported inflation (+0.5% y/y in Feb-25 vs. -0.4% y/y in Jan-25). Meanwhile, inflation for mixed goods slightly slowed to 3.1% y/y in February, down from 3.5% y/y in Jan-25. Notably, core inflation, excluding volatile food, energy and tobacco prices, remained unchanged at 2.0% y/y in Feb-25.

By categories, February’s annual inflation was largely driven by price increases in food and non-alcoholic beverages (+3.7% y/y, +1.25ppts), healthcare (+5.4% y/y, +0.45ppts), alcoholic beverages & tobacco (+4.7% y/y, +0.32ppts), education (+5.2% y/y, +0.26ppts) and hotels & restaurants (+6.8% y/y, +0.23ppts) categories. In contrast, the communication category recorded a significant decrease (-12.2% y/y, contributing -0.45ppts), followed by furnishings, household equipment and maintenance (-2.1% y/y, -0.11ppts) in February. 

On a monthly basis, there was a 0.4% y/y inflation in Feb-25, mainly due to rising prices in food and non-alcoholic beverages (+0.7% m/m, +0.20ppts) and healthcare (+2.3% m/m, +0.18ppts) categories.

We forecast average annual inflation at 3.9% in 2025.

Tourism revenues estimated at US$ 246mn in Feb-25 
Tourism revenues amounted to US$ 246mn (flat y/y) in Feb-25, according to our estimates. Overall, in 2M25, tourism revenues increased by 0.7% y/y to US$ 536mn, by our estimates. We forecast tourism revenues to reach US$ 4.5bn in 2025.

International reserves at US$ 4.2bn in Feb-25 
Gross international reserves decreased by 10.8% y/y to US$ 4.2bn in Feb-25, according to NBG. On a monthly basis, the reserves were down by 4.5% (-US$ 201.8mn). Changes in reserves were attributed to the government and/or banking sector FX operations. Notably, as of Feb-25, monetary gold accounted for 15.4% of total international reserves.