The relative stability of the Lari exchange rate and international prices influenced the local market, which avoided a price rise on several products.
The Georgian government subsidized the cost of nine food products, and the price dropped in foreign markets.
Importer Iva Chkonia says that the suspension of subsidies will not affect the product cost in the future.
In his words, a government-developed plan aiming to balance prices was not attractive for companies, and many of them did not engage in the program.
"Most importers did not participate in the subsidy program. There were certain conditions that companies could not satisfy. For most of them, these conditions were unacceptable. The subsidy insured the exchange rate, although prices on international markets have mainly declined. If not for currency fluctuations, it would probably be possible to lower food prices even further. Shortly, when subsidies expire, this will have little effect on prices. We do not expect price reductions, but we do not believe that they will rise," Iva Chkonia noted.
He says a decrease in the purchasing power of the population, which led to a sharp decline in sales, is the most severe problem for the companies.
The Georgian government subsided prices for nine essential food products earlier in spring. The program will end on July 15, 2020.
Маri Chitaia
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