Natakhtari: Production is Becoming more Expensive in Georgia

Products produced in the country are becoming more expensive again. The producer price index has grown by almost 12 percent year on year.

Production of food products, beverages, basic metals has become more expensive. The main reason is the depreciation of the Georgian lari. At the same time, the profit margin of the private sector is decreasing. Due to the increase in utility bills, the companies predict a further increase in production.

"The price of raw materials is rising, utility bills are rising. This, obviously, is not directly proportional to the price of the final product, although we still have to increase the price of products. This is what the industry needs the least because, as a result, the number of products we sell is declining. Consequently, the market is shrinking. We consider how the increase in production will affect the product, while the increase in product will affect sales. Therefore, companies often have to adjust the price based on adjusting their margins, ”said Nikoloz Khundzakishvili, Natakhtari's director of corporate affairs.

This year, representatives of the private sector predict further growth in production costs. The reason is the increased utility bills, which will subsidize only a certain part of the business and the government will cover half of the increased tariff fee. Therefore, manufacturers call on the government and the National Bank to take appropriate steps to avoid inflationary processes. Otherwise, they expect further growth in consumer prices.