Annual inflation at 4.3% in Jul-25
In Jul-25, Georgia’s annual inflation increased to 4.3%, following a 4.0% posted in previous month. The increase was mainly driven by domestic inflation, which rose further to 5.4% y/y (Jun-25: 5.2%), and by mixed-goods inflation, which climbed to 7.5% y/y (Jun-25: 7.2%). In contrast, imported goods continued to see price declines, though the pace of deflation eased to -1.6% y/y from -2.0% y/y in June, moderating headline inflation. Core inflation, excluding food, energy and tobacco prices, remained steady at 2.2% y/y in July.
By categories, annual inflation in Jul-25 was largely driven by price increases in food and non-alcoholic beverages (+10.4% y/y, +3.45ppts), healthcare (+9.5% y/y, +0.80ppts), alcoholic beverages & tobacco (+3.7% y/y, +0.24ppts), education (+4.6% y/y, +0.24ppts) and hotels & restaurants (+6.7% y/y, +0.21ppts) categories. Meanwhile, deflation was observed in the transport (-3.8% y/y, -0.48ppts), communication (-6.9% y/y, -0.24ppts) and clothing & footwear (-2.8% y/y, -0.17ppts) sectors.
On a monthly basis, consumer prices fell by 0.2%, reflecting declines in clothing & footwear (-4.1% m/m, -0.19ppts) and food and non-alcoholic beverages (-0.4% m/m, -0.14ppts) categories, partially offset by higher transport costs (+1.8% m/m, +0.19ppts).
We forecast average annual inflation at 3.7% in 2025.
International reserves at US$ 5.0bn in Jul-25
Gross international reserves increased by 7.5% y/y to US$ 5.0bn in Jul-25, according to NBG. On a monthly basis, the reserves were also up by 7.1% (+US$ 331.3mn). Changes in reserves were attributed to the changes in government and/or banking sector FX operations, and likely also to NBG’s FX purchases via BMatch platform (information will be available on 25 August). Notably, as of Jul-25, monetary gold accounted for 15.1% of total international reserves.
