Economist Paata Bairakhtari warns that if the National Bank of Georgia cannot keep the lari's exchange rate stable, then rising oil prices and the lari's devaluation will significantly affect prices.
Speaking on "Commersant" radio, Paata Bairakhtari points out that local companies will surely account for the rise in oil prices when setting their prices.
"Unfortunately, I cannot say anything encouraging concerning price hikes. Oil price has surpassed $100 for the first time since 2022. If we look at global markets over the past six months, we see an approximate 48% increase in oil prices, which, of course, will reflect in the prices of local companies, and will eventually hit consumer prices.
"The only thing we can hope for is that if the National Bank successfully addresses the situation and the lari’s rate stays balanced, then the shock might be more or less neutralized leaving only the impact of rising global oil prices. Adding the fluctuations in the national currency to this, then, of course, the shock will be twice as strong and unfortunately, will have a substantial impact on price levels," notes Paata Bairakhtari.
