ISET Policy Institute likes to keep our tradition alive and cook up a New Year’s Supra Index for our readers every year. The Index shows the cost of a standard festive “supra” meal for a family of five or six people in each region of Georgia. Traditional dishes included in our calculations are: mtsvadi (grilled cubes of meat), satsivi (chicken in walnut sauce), khachapuri, trout, (pan-fried) chicken tabaka, salad Olivie, pkhali (chopped and minced vegetables with walnut), cucumber and tomato salad, and for dessert, fruit and gozinaki (caramelized walnuts fried in honey). The price of the New Year’s supra, of course, depends on the variety of dishes served for the feast.
The average cost of this New Year’s supra in December 2020 is 168.2 GEL, which is 4.2% higher compared to last year (December 2019).
As shown below, compared to last year the price of a New Year’s supra has gone up in all regions of Georgia, except for Samegrelo-Zemo Svaneti and Shida Kartli. The Index’s value is highest in the Racha-Lechkhumi and Kvemo Svaneti regions (179.2 GEL) and lowest in Samegrelo-Zemo Svaneti (154.4 GEL).
Cost of a Georgian New Year’s Supra measured in GEL
|Racha-Lechkhumi & Kvemo Svaneti||157.2||179.2||14.0%|
Source: Ministry of Environmental Protection and Agriculture of Georgia, 2020
In December 2020, almost all food products have become more expensive compared to the same month last year (December 2019). The biggest contributors to the increase in prices were: cheese (15%), eggs (11%), tomatoes (10%), milk (9%), eggplants (7%), chicken meat (6%), and honey (9%). The only products to have decreased in price were apples (-10%), carrots (-8%), and potatoes (-3%).
Price increases are particularly high for internationally traded commodities and those that use imported intermediate inputs in production. The depreciation of the Georgian lari has placed notable upward pressure on the prices of imported goods, with depreciation against the US dollar in excess of 13.5% in December 2020 compared to December 2019.
Despite this, there is a relatively small increase in food prices compared to last year. The lower inflation rate this year reflected last year’s high price base and can be partially attributed to the decrease in aggregate demand caused by the COVID-19 pandemic. Decreased demand for agricultural products from the HORECA (hotel, recreation, cafe) sector paired with consumers’ decreased income might be responsible for the lower-than-expected food inflation.
In addition, due to restrictions related to the pandemic, the number of tourists, especially for skiing at winter resorts, has drastically decreased; this, in turn, might put downward pressure on food prices.