National currency continues to devaluate

Georgia’s national currency, the lari, is continuing to devaluate against the US dollar and the euro.

The cost of 1 lari at currency exchange booths equals 2.65-2.67 USD, when the official exchange rate provided by the National Bank of Georgia is 2.61.

Meanwhile, 1 lari amounts to 2.81 euro at currency exchange booths and the official rate is 2,77.

The rough devaluation of the national currency, which started in November 2014, has had a negative effect on the Georgiam people, as most Georgians take their salaries in the national currency, and the average salary ranges between 400-500 GEL.

The devaluation has also had a negative effect on prices, as the cost of everyday products is increasing, especially in the pre-New Year period.

Georgia’s Minister of Economy Giorgi Gakharia claims the lari will stabilize soon.

He claims the major reason behind the lari's depreciation was the current situation in Georgia’s key trade partner states, especially in Turkey.

However, the Government has made such “positive predictions” since 2014, with the situation becoming increasingly complicated.

The Government has never come close to admitting that their own activities could also be a reason behind the economic crisis, with the country being nearly almost entirely dependent on imported products.

Recently, the Government announced it will provide “fast economic development”, which will apparently include increased excise tax on tobacco, imported cars and oil products from the next year.

One can guess and tolerate increased excise taxes on tobacco, gambling or imported cars, but an increase in the price of oil products will make the condition of the Georgian people even worse.

An increase in prices for oil products, especially by 12-25 tetries ,directly means an increase in price of products generally, as transporting products is imaginable without fuel.

It is very likely that the next year will be even more challenging for the Georgian people and the Government.