The average cost of cooking one standard Imeretian khachapuri currently stands at 4.33 GEL, which is 6.9% lower month-on-month (compared to April 2021), and 5.6% higher year-on-year (compared to May 2020). The main contributor to the price change is a seasonal decrease in the price of cheese, which fell by -13.1%, compared to the previous month (April 2021).
The official estimate of annual price inflation, published by GeoStat, also shows that CPI increased by 7.7% year-on-year. Annual (y/y) CPI inflation was mostly driven by price increases in such categories as oils and fats (42.7%), sugar, jam, honey, chocolate and confectionery (13.7%), milk, cheese and eggs (8.0%), coffee, tea and cocoa (8.0%), fish (7.6%), mineral waters, soft drinks, fruit and vegetable juices (7.2%), meat (6.0%), and bread and cereals (5.8%). This annual price increase is driven largely by the depreciation of the Georgian lari against the US dollar. The average GEL/USD exchange rate in May 2021 was 3.38, which is 6% higher than in May 2020. The depreciation of the Georgian lari has placed notable upward pressure on the price of imported goods and the share of imports is particularly high in the case of oils and fats.
According to Geostat, the only two product categories whose prices went down y/y are: vegetables (-23.3%) and fruit and grapes (-20.9%). This decrease is partially due to high prices in the reference year. During the observed period last year, the first lockdown was in place due to the pandemic. Disruptions in supply chains associated with the COVID-19 pandemic led to food shortages that further increased food prices last year.