Economy Minister: upward trend in prices mainly due to supply disruptions, record high fuel prices
The Minister also said the rise in fuel prices was one of the factors behind the high inflation rate in Georgia, saying it would become “significantly cheaper” during the year, citing fuel purchased as lower cost abroad that had not yet been imported. Photo: Georgian Economy Ministry
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The trend of price increases in Georgia is mainly caused by supply disruptions and record-high fuel prices, Georgian Economy Minister Levan Davitashvili said on Wednesday, calling the trend a “challenge any Government faces”.
Davitashvili, who met with members of the European Business Association earlier today, noted the war in Ukraine had created new challenges and stressed the importance of “consolidation, trust and coordination” in the reality.
The pandemic was not over yet when the war completely changed the reality not only in the region but all over the world. We have seen the trends in price increases [...] in all countries [as a result],” Davitashvili said.
The Minister also said the rise in fuel prices was one of the factors behind the high inflation rate in Georgia, saying it would become “significantly cheaper” during the year, citing fuel purchased as lower cost abroad that had not yet been imported.
We are observing this [process] and are having a dialogue with the private sector, so that no one can take advantage of this situation,” Davitashvili said.
The rise in fuel prices in Georgia has been linked to the increase in oil prices around the world, as well as in shipping costs in the Black Sea amid the ongoing war in Ukraine.
The Minister also said a “very large” part of Georgia's foreign exchange earnings, as well as tourism earnings, came from Ukraine and Russia, and added the Government was trying to balance these problems.
Davitashvili pointed out a Stand-By Arrangement reached between the country and the International Monetary Fund on a $289 million programme, calling it “additional financial resources” for the macroeconomic stability of the country.
In March, the Consumer Price Index in Georgia increased by 2.5 percent, while the annual inflation rate equalled 11.8 percent.
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A reduction in fuel prices in Georgia is expected following the inspection of the market by the Georgian National Competition Agency, Levan Davitashvili, the country’s Economy Minister, said on Monday.