Will Georgia's inflation continue to rise?

According to Georgia's statistical department in August 2010 inflation in the country reached 9.5%, which is the highest figure over the past 24 months. In July inflation was 7%. PM Gilauri stated at the beginning of September high inflation was due to the crisis with some food products. Economics Professor and former minister during the Shevardnadze administration, Avtandil Silagadze said that if price increases are not regulated then inflation could reached 20% by the end of the year. According to Georgian legislation if inflation goes above 12%, the national bank leadership should assume responsibility. Silagadze thinks that the ruling administration will take some radical measures to ensure the extremes are not reached. NBG has different levers to control inflation – it has USD 2 billion in currency reserves. However this would not rescue the situation completely as the reserves are limited. Analysts think that the country’s government should stop non rational spending; it should make different plans. The country should take a long term perspective and facilitate the development of the economic system, creating jobs. These are the first steps towards controlling the process of inflation.