Annual inflation at 4.0% in Dec-25
In December 2025, Georgia’s annual inflation retreated to 4.0%, down from 4.8% in previous month. The moderation was mainly driven by a slowdown in mixed-goods inflation to 4.1% y/y in Dec-25 from 5.8% y/y posted a month earlier, along with a decline in imported goods prices by -0.2% y/y (vs. 0.8% y/y in Nov-25) and a modest easing in domestic inflation to 6.2% y/y (vs. 6.4% y/y in Nov-25). Notably, core inflation – excluding food, energy, and tobacco – also retreated to 1.6% y/y in Dec-25 from 2.3% in previous month.
By categories, annual inflation in Dec-25 was largely driven by price increases in food and non-alcoholic beverages (+8.8% y/y, +2.98ppts), healthcare (+7.0% y/y, +0.56ppts), alcoholic beverages & tobacco (+4.4% y/y, +0.28ppts) and hotels and restaurants (+6.9% y/y, +0.21ppts) categories. Meanwhile, deflation was recorded in communication (-4.7% y/y, -0.15ppts), furnishings, household equipment and maintenance (-1.6% y/y, -0.09ppts), recreation & culture (-1.6% y/y, -0.07ppts) and transport (-0.6% y/y, -0.06ppts) categories.
Measured over the entire year, average annual inflation came in at 3.9% in 2025, in line with our expectation. For 2026, we forecast average annual inflation at 3.0%.
International reserves at US$ 6.2bn in Dec-25
Gross international reserves increased by 38.4% y/y to a record US$ 6.2bn in Dec-25, according to NBG. On a monthly basis, the reserves rose by 5.9% (+US$ 342.6mn). Changes in reserves were attributed to the changes in the value of monetary gold (+US$ 40.6mn m/m) along with the government and/or banking sector FX operations, and likely also to NBG’s FX trading via BMatch platform (information will be available on 26 January). Notably, as of Dec-25, monetary gold accounted for 16.3% of total international reserves.
Tourism revenues estimated at US$ 280mn in Dec-25
Tourism revenues increased by 5.3% y/y to US$ 280mn in Dec-25, according to our estimates. Overall, in 2025, tourism revenues came in at US$ 4.6bn (+4.9% y/y), by our estimates.
We forecast tourism revenues at US$ 4.9bn in 2026.
Georgia’s exposure to Iran is limited mainly to tourism, with tourism revenues from Iran accounting for 2.7% of the total in 9M25. Given this low exposure, the impact of prolonged instability in Iran on Georgia’s tourism sector is expected to be minimal.
