Economist Giorgi Khishtovani warns that if global oil prices remain at record highs, Georgia’s inflation could rise to around 10% in the coming months. Speaking on “Business Morning,” he explained that the surge in energy prices fuels increases across many goods and services, creating additional inflationary pressure. He noted that monitoring inflation dynamics in March and April will be especially important.
According to Khishtovani, Georgia is highly vulnerable because its economy depends heavily on imports. Rising oil prices directly affect agriculture, retail, distribution, and transportation, leading to broader price hikes. If global conflicts keep oil prices at $120–150 per barrel, he said, Georgia will face a new economic reality where price increases become unavoidable for both businesses and consumers.
Khishtovani believes that fiscal policy adjustments could help soften inflationary pressure. One tool, he said, could be reviewing the excise tax on fuel, which would partially stabilize fuel prices. However, he also noted that limited budget resources make such steps difficult. Tax revenues in the first two months of the year increased by only 4%, while inflation reached 4.6%, indicating that the state is struggling to mobilize sufficient funds.
This situation, he argued, exposes a contradiction: while the government promotes a narrative of economic growth and stability, external shocks reveal a lack of financial buffers to support businesses or vulnerable sectors. In February 2026, inflation in Georgia stood at 4.6%, driven mainly by rising food prices (up 9.5% annually), higher healthcare costs (up 5.9%), and increased prices in alcohol and tobacco (up 4.3%), the latter largely due to excise tax changes.
