Natia Turnava, the Acting Governor of the National Bank of Georgia, stated that domestic inflation had remained below the target rate for the past 20 months, with the optimal inflation target for the country’s development currently set at 3 percent.

In her address to the Budget and Finance Committee of the Georgian Parliament, Turnava highlighted the critical role of the central bank’s monetary policy, which employs an inflation targeting framework designed to ensure price stability. This approach involves setting an inflation target in advance and managing economic policies to maintain inflation close to this target over the medium term.

Turnava emphasized that consistent adjustments to monetary policy, encompassing both tightening and normalization measures, as well as the effective transmission mechanisms within the existing economic framework, had contributed to the successful stabilization of prices. Despite external economic shocks in recent years, Georgia has managed to keep inflation below the established target rate. Since the beginning of 2023, inflation has shown a downward trend, remaining below the target for 20 consecutive months. As of November 2024, inflation was reported at 1.3 percent.

In response to this decline in inflation, Turnava explained that the National Bank began gradually reducing the monetary policy rate in May 2023, lowering it by a total of three percentage points, bringing it to 8 percent as of November 2024. According to the latest macroeconomic forecasts, the central bank anticipates that inflation for 2024 will average around 1.2 percent and is expected to stabilize around the target rate in the medium term.

Furthermore, the central bank announced that its Monetary Policy Committee had developed its annual policy document, "Main Directions of Monetary and Exchange Rate Policies," which outlines the inflation target and the primary monetary policy instruments to be used over the next three years. This document is set to be submitted for parliamentary approval.