Manufacturing costs decrease in Georgia

Georgian producers are dropping the cost of Georgia-made products to keep up with decreasing manufacturing costs, meaning consumers are paying less for basic services and goods.

In May 2016 the Producer Price Index (PPI) for industrial products decreased 0.4 percent over April 2016, said the National Statistics Office of Georgia (Geostat).

Year-on year (y/y) the PPI declined 2.8 percent however it was still 22.4 percent higher compared to the 2010 average, revealed Geosat.

The decrease of Georgia’s monthly PPI rate in May was mainly driven by a 8.2 percent price decrease for mining and quarrying, which had a downward effect of -0.33 percentage points on the overall monthly index change.

Prices were also lower for electricity, gas and water (-1.6 percent) and its impact on the overall index change amounted to -0.22 percentage points.

The annual PPI rate was mainly affected by price changes for the following sections:

Manufacturing: prices for the section went down 4.8 percent with the relevant contribution of -4.02 percentage points to the overall annual PPI change.

Supply of electricity, gas and water: prices for the section increased 17.4 percent and contributed 2.20 percentage points to the overall PPI rate.