February 2016: Inflation drops to 0.1 percent

Inflation in Georgia is dropping following monthly price changes to several commodities in the consumer basket including food, alcohol and tobacco.

In February 2016 prices increased for food, beverages, tobacco and communication services, while transport costs dropped, said the National Statistics Office of Georgia, Geostat.

Monthly inflation in February 2016 reached 0.1 percent (0.9 percent in January 2016) while annual inflation equalled 5.6 percent (the same as in January 2016).

Month-on-month the cost of food and non-alcoholic beverages increased 7.5 percent and contributed 0.45 percentage points to the overall index change, said Geostat.

This was mainly attributable to 13.6 percent price increase for tobacco. Prices were also higher for alcoholic beverages,” said Geostat data.

In February 2016 the cost of communication services (telephone, telegraph and telefax) were 4.1 percent higher compared to the previous month. This contributed 0.13 percentage points to the overall monthly inflation.

Meanwhile month-on-month transport costs dropped 2.3 percent and this contributed -0.28 percentage points to the overall inflation rate. Within this group prices were down for fuels and lubricants (-5.3 percent).

Over a 12 month period the cost of food and non-alcoholic beverages increased 4.6 percent and contributed 1.43 percentage points to the overall inflation rate.

It was worth noting price increases for the following subgroups: 

• Fruit and grapes (33 percent);
• Oils and fats (10.6 percent); and
• Coffee, tea and cocoa (10 percent).

Year-on-year (y/y) health-related costs increased 10.5 percent, with contributed 1.0 percentage points to overall annual inflation. Prices mainly rose for medical products, appliances and equipment (19.6 percent) and out-patient services (11.4 percent).

Geostat said in the past year the cost of alcoholic beverages and tobacco rose 14.3 percent, contributing 0.84 percentage points to overall inflation. Since February 2015 tobacco costs rose 16.5 percent and alcoholic beverage costs increased 14 percent.

Y/y the cost of furnishings, household equipment and maintenance rose 10.5 percent and this group contributed 0.68 percentage points to the overall annual inflation.