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By the End of the Year Products Price to Hike in Georgia

“Resonance” daily writes that prices of agricultural products are growing  in Georgia.

Experts believe that with the end of the agricultural season, food prices will continue to grow. The government has no mechanisms of control over the situation, and  according to the Statistical Service, in August, annual inflation was 3.4%.

The government constantly says that there is no high inflation in the country, and the process is well controlled – but the facts show the opposite.

From September 1,  kg  of eggplant costs 1 GEL on  the agricultural markets of Georgia, beans – GEL 2, potatoes – GEL 1, tomatoes – GEL 1,  Imeretian cheese – GEL  9, etc. That is, prices are constantly increasing, and by year-end products will be even more expensive.

It turns out that a rise in food prices is the main source of inflation, as the cost of other goods eitherdecreases or does not change.

One of the reasons for the increase in food prices is the opening of the Russian market, though drought and other natural disasters can be considered as a reason as well. For example, in Kakheti a significant part of the crop was destroyed by drought.

Food is getting more expensive, the standard of living is still low, and the unemployment rate is high. People have to live in difficult circumstances – although, according to the Georgian Statistics, the cost of living for a family of 4 is only GEL  266, in fact, this  money is not enough even for two weeks.

According to the statistics expert Soso Archvadze, the rise in prices is related to several factors – primarily seasonal, which is traditional for Georgia – in summer products become cheaper, in the fall –price hike is observed.

The second factor  is  a growth of wages, and as a consequence,  the growth of the money supply in circulation.

“We are not talking about a large increase, but in any case, even if wages rise by GEL 100 per month, consumers immediately buy more products, which leads to higher prices. This is especially true for low-income citizens, who are always striving to improve their menu. In this case, the state has only two levers to influence the situation – import growth or withdrawal of money from circulation,”- Soso Archvadze notes.

However, “Resonance” writes that  no one  is going to undertake measures, as the government believes that everything is okay and there is no need to use   any leverages.