Inflation in 2025 exceeded the 3% target following a two-year pause, reaching 3.9%. Whilst 0.9 of a percentage point may not seem large, price increases were not uniform across all products. Food prices rose by 8.5% and healthcare costs by 8.1%. Considering that low-income households spend a large share of their income on food, life has become relatively more expensive for them.
Food saw the highest price increase amongst product groups, followed by healthcare and services in hotels and restaurants. Prices for communication, transport and furniture fell, although these declines had little impact on overall inflation. The combined weight on food and healthcare in the inflation calculation exceeds 40% whilst communication and transport account for 16%. A 3% drop in transport costs, particularly transport operation expenses, could not offset the faster rise in food prices.
Table 1: Inflation by Product Group
Source: National Statistics Office of Georgia
The year 2025 was no exception. Inflation on food products exceeded the overall inflation between 2013 and 2025 in nine out of 13 years. As a result, consumer prices rose by 73% between 2013 to 2025 whilst prices for food and non-alcoholic beverages increased by 113%. Items and services that cost GEL 100 in 2012 required GEL 173 in 2025 whilst the same food products that cost GEL 100 in 2012 would cost consumers GEL 213 in 2025.
Graph 1: Changes in Consumer Price Index (2012=100)
Source: National Statistics Office of Georgia
Over the year, 25 of the 30 most expensive products and services were related to food and healthcare. The consumer basket includes a total of 305 items and services, 199 of which saw price increases, 92 – decline and 14 unchanged in 2025.
Table 2: Top 30 Products/Services Whose Prices Rose
Source: National Statistics Office of Georgia
Inflation is generally a characteristic of a market economy. It becomes a problem when prices rise too quickly or when the rate of price growth exceeds income growth.
Although annual data has not yet been published, wages for salaried employees increased by 10.3%-11.7% in the first three quarters, thus outpacing inflation.
Pensions for people under 70 rose by 11.1% in 2025 – from GEL 315 to GEL 350 – whilst pensions for those aged 70 and over increased by 8.4% - from GEL 415 to GEL 450. Pension growth also outpaced inflation in the aforementioned cases, although several factors should be taken into account:
- Wage increases were not uniform – those who did not receive a raise saw their real income decline.
- Three growth rates for pensions roughly matched the rise in food and healthcare prices, significantly reducing real gains and resulting in a negative impact for some.
- Expenses vary individually along with income, meaning that personal inflation may have been much higher than the official rate for part of the population.
The inflation target constitutes 3%. The 2026 state budget is based on 3.3% inflation whilst the National Bank forecasts that inflation should decrease to 3.5% in 2026.
