Annual inflation at 4.6% in Aug-25
In August 2025, Georgia’s annual inflation rose to 4.6%, up from 4.3% in July. The inflation was mainly driven by domestic inflation, which accelerated to 6.6% y/y (Jul-25: 5.4%), followed by mixed-goods inflation at 6.3% y/y (Jul-25: 7.5%). In contrast, imported goods prices declined by 0.8% y/y (Jul: -1.6% y/y). Meanwhile, core inflation, excluding food, energy, and tobacco, climbed to 2.8% y/y in Aug-25 from 2.2% posted in previous month.
By categories, annual inflation in Aug-25 was largely driven by price increases in food and non-alcoholic beverages (+10.0% y/y, +3.35ppts), healthcare (+9.3% y/y, +0.78ppts), alcoholic beverages & tobacco (+3.7% y/y, +0.30ppts), education (+4.6% y/y, +0.24ppts) and hotels & restaurants (+6.8% y/y, +0.22ppts) categories. Meanwhile, deflation was recorded in transport (-2.4% y/y, -0.31ppts), clothing & footwear (-2.9% y/y, -0.19ppts) and Furnishings, household equipment & maintenance (-1.4% y/y, -0.08ppts).
On a monthly basis, consumer prices increased by 0.3%, reflecting price rises in transport (+1.3% m/m, +0.14ppts), food and non-alcoholic beverages (+0.1% m/m, +0.07ppts) and alcoholic beverages & tobacco (+0.7% y/y, +0.05ppts) categories. These increases were tempered by price declines in clothing & footwear (-2.0% m/m, -0.09ppts) category.
We forecast average annual inflation at 3.7% in 2025.
International reserves at US$ 5.2bn in Aug-25
Gross international reserves increased by 7.5% y/y to US$ 5.2bn in Aug-25, according to NBG. On a monthly basis, the reserves were also up by 3.7% (+US$ 183.9mn). 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 September). Notably, as of Aug-25, monetary gold accounted for 15.1% of total international reserves.
