Rising prices for goods and services in Georgia are primarily driven by higher operating costs, particularly wages and utility bills, according to Mikheil Chelidze, Head of the Association of Small and Medium Enterprises. Speaking to BMG, Chelidze said that wage growth, especially in the service sector, has become one of the most significant factors influencing business expenses.
He explained that when costs increase, companies face a difficult choice. “When cost prices rise, any company has two options: either optimize expenses by eliminating unnecessary costs, or increase prices,” Chelidze said. If neither option is chosen, he noted, profit margins are inevitably reduced. As a result, businesses should prioritize cost optimization to ensure that any price increases remain reasonable for consumers.
In addition to wage growth, Chelidze pointed to inflation and rising utility costs as key contributors to higher business expenses. “Inflation is present in the country and it is quite high, which naturally affects price formation. Utilities are another major cost component, and those costs are also increasing,” he explained.
Despite these pressures, Chelidze stressed that higher wages and prices should not be interpreted as signs of economic deterioration. “When a country moves forward, the economy develops, and wages and prices follow the trend,” he said. “The increase in inflation and wages does not mean the situation is bad, on the contrary, it reflects economic growth and alignment with reality.” According to Geostat, average wages in the business sector rose 10.5% year-on-year in the third quarter of 2025, reaching GEL 2,421, while wages in the non-business and financial sectors increased by 10.3% to GEL 2,009.
