In February, the average cost of cooking one standard Imeretian Khachapuri dropped to 3.29GEL, which is 3.4% lower month-on-month (compared to January 2015), and 4.8% lower year-on-year (compared to February 2014). At least as far as khachapuri ingredients are concerned, prices are going down, not up.

The main contributors to y/y Khachapuri Index deflation in February were cheese (-11.5%), eggs (-1.1%) and butter (-2%). The price of the following products increased: flour (12.3%), yeast (18.9%), and milk (5.1%).

The general Consumer Price Index (CPI) is based on a much broader basket of goods and services, yet CPI inflation in February 2014 is very much business-as-usual: 0.1% m-o-m, 1.3% y-o-y.

Fairly large increases were recorded for the following goods categories: alcoholic beverages and tobacco (8.1%), health (6.4%), restaurants hotels (2.8%). Food and non-alcoholic beverages the single largest category in the CPI increased by only 1.9%. Price decreased for transport (-7.8%), as well as clothing and footwear (-5.4%).

As shown in the chart, inflation has declined in recent months despite Lari's devaluation relative to USD since December 2014. The last episode of relatively high inflation, observed in September 2014, was related to a bad harvest of fruits and vegetables.