Monthly and annual inflation drop in Georgia

Georgia’s monthly and annual inflation rate are slightly dropping following price changes to several major commodities in the consumer basket.

Today Georgia’s National Statistics Office, Geostat, released latest information about the country’s monthly and annual inflation rates; monthly inflation in December 2015 reached -0.6 percent (0.3 percent in November) while annual inflation equalled 4.9 percent (6.3 percent in November).

Month-on-month transport costs dropped 3.6 percent, which contributed -0.40 percentage points to the overall inflation rate. Within the group prices were down for fuels and lubricants (-7.6 percent);

Prices of alcoholic beverages and tobacco were one percent lower and contributed -0.05 percentage points to the overall index change. The prices decreased for tobacco (-1.7 percent);

Geostat noted, prices dropped for furnishings, household equipment and maintenance group. Price decline for the group amounted to 0.8 percent. Consequently, the group contributed -0.05 percentage points to the overall monthly inflation rate.

Over a 12 month period the cost of food and non-alcoholic beverages increased 3.8 percent and contributed 1.16 percentage points to the overall annual inflation rate.

Notable price increases were recorded for the following subgroups:

• Fruit and grapes (17.3 percent);
• Oils and fats (12.3 percent); and
• Coffee, tea and cocoa (9.7 percent).

Health-related costs rose 10.5 percent, with the relevant contribution of 0.98 percentage points to the overall annual inflation. The prices mainly increased for subgroups of medical products, appliances and equipment (24.2 percent) and out-patient services (7.7 percent);

The annual price increase of housing, water, electricity, gas and other fuels, edged up to 8.3 percent, contributing 0.70 percentage points to the overall index change. Prices were substantially higher for electricity, gas and other fuels (10.8 percent);

Transport cost decreased 4.2 percent. Consequently, the group contributed -0.48 percentage points to the overall annual inflation rate. The prices significantly fell for fuels and lubricants (-12.1 percent).

Meanwhile, president of the National Bank of Georgia (NBG) Giogri Kadagidze announced inflation in Georgia would reach its peak in the first quarter of 2016 and would return to the target rate from the second quarter.