In March 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.27 GEL, which is 5% lower month-on-month (that is compared to February 2016), and 6.9% higher year-on-year (compared to March 2015).

The negative monthly change in Kh-Index follows the traditional seasonal trend in fresh milk production in combination with a temporary slump in demand due to the Great Fast of Lent, which started on March 14.

The annual increase in Kh-Index, however, reflects an uptick in annual price inflation. Practically all khachapuri ingredients (with the exception of flour, which dropped 5.1% y/y) went up in price compared to last year: cheese added 12.5%, eggs - 1.6%, milk - 4.3%, butter - 9%, and yeast - 8.6%. These increases are very much in line with the official estimate of annual inflation by GeoStat, currently standing at 4.1%. Just like the Khachapuri Index, in monthly terms, CPI inflation is actually in the negative territory (March CPI is down by 0.3% m/m).

The leaders in the annual CPI inflation are products falling in the “alcoholic beverages and tobacco” category (up 14 %) due to an increase in excise taxes. Prices went up, although at a slower rate, in other categories as well: health expenditures are up by 10.2%; food and non-alcoholic beverages – by 2.3%. Prices remained roughly stable or slightly decreased in the clothing and footwear (down 0.8%) and transport (down 3.6%) categories.