PM says inflation ‘stabilized’, defends pension increases

Georgian Prime Minister Irakli Kobakhidze has said the government has succeeded in stabilizing inflation after a spike in food prices at the beginning of the year and defended its record on pension spending against criticism from opposition lawmakers.

Speaking in Parliament on Friday, Kobakhidze argued that opponents often misrepresent inflation data by confusing annual price changes with month-to-month inflation figures.

“Opponents frequently cite annual statistics and present them as if they were monthly data. This creates a misleading picture of price growth,” he said.

According to the prime minister, Georgia experienced relatively high inflation in January, particularly in food and non-alcoholic beverages, with prices rising by approximately 2.5% compared to December.

“We had high inflation in January. For a single month, 2.5% is a very high figure. However, from February onward we managed to stabilize the process of price increases,” Kobakhidze stated.

He said inflation remained low between February and May and noted that Georgia recorded deflation - meaning an overall decline in prices - in February and May.

“Over February, March, April and May, inflation was very low, and in two of those months we actually recorded deflation,” he said.

Kobakhidze attributed the trend to measures introduced by the government and expressed confidence that inflation would remain within what he described as the optimal annual range of 2% to 4%.

“Consumer inflation stood at 3.9% last year, and we hope to maintain inflation within optimal limits this year as well,” he said.

The prime minister also compared recent economic indicators with those recorded during 2019–2021, arguing that inflation was “significantly higher” during that period.

Kobakhidze added prices for food and non-alcoholic beverages increased by 39% during those three years, while average wages rose by only 22%.

By contrast, he said consumer prices have increased by approximately 6.5% over the past three years, while average salaries have risen by around 48%.

“The key point is that wage growth has significantly outpaced inflation,” Kobakhidze said.

Responding to opposition claims that the government has failed to allocate sufficient resources for pensioners, Kobakhidze said pension funding increased substantially in the latest budget.

“We demonstrated with figures that only last year the pension fund was increased by more than half a billion lari,” he stated.

The prime minister argued that budget growth has enabled the government to allocate additional resources to pension payments and dismissed criticism of the government's pension policy.

“When you claim that we are unwilling to spend money on pensions, the fact that more than GEL 500 million was added to pension funding proves otherwise,” Kobakhidze said.