BAKU, Azerbaijan, June 16
By Tamilla Mammadova – Trend:
Bread price will increase by 20-25 tetri (6-8 cents) from July in Georgia, Trend reports via Georgian media.
The government program on wheat flour subsidy expires in late June.
Last year, the Georgian government decided to subsidize wheat flour for 4 months (from December through March) to avoid an increase in bread prices. The budget of the program was 10 million lari ($3.1 million). The state subsidy amounted to 10 lari ($3.16) per 50-kilogram of wheat flour. The fixed price of 50-kilogram first-grade quality wheat flour was set at 53 lari ($16.77).
However, due to the increase of the wheat price on the international market, the government had to increase the subsidy to 15 lari ($4.75) at the request of the private sector.
Due to the created objective reality, the subsidy program was extended for another 3 months after the expiration of the first phase. Due to the increased utility costs and VAT taxation, the amount of the subsidy was also increased to 20 lari.
"Subsidies do not help the current economic situation and this amount of subsidies is not enough. The price of 1 kg of bread will increase by 40-50 tetri (13-16 cents), therefore the retail price will be grown by 20-25 tetri. Flour is just one component of the bread. We will review the prices after another flour subsidy program is announced," said Giorgi Dolidze, head of Dia Amo company.
About 7 million lari ($2.2 million) is provided for the extension of the program for the next three months. It will be known by the end of the month whether the government will choose to continue the subsidy again to catch the price of bread.
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