With the New Year festivities finally behind us, ISET’s Khachapuri Index started on its seasonal downhill trajectory. In January, the Index slid 4.3% m/m, reaching 3.61 GEL per one standard portion of the Imeretian khachapuri. At the same time, it is some 6% higher y/y (compared to January 2015).

The average cost of cooking one standard portion of Imeretian Khachapuri stood at 3.61 GEL in January 2016. This is 4.3% lower m/m (compared to December 2015), and 6% higher y/y (compared to the same month of the previous year, January 2015). Thus, annual inflation, as measured by ISET’s Khachapuri index, is roughly in line with the official estimate of 6%, based on GeoStat’s Consumer Price Index (CPI).

We have recently updated the GDP series (the dependent variable in our model), using the revised GDP growth rates available from Geostat. Based on the November data, the forecast for GDP growth in the fourth quarter of 2015 now stands at 3.4%. This is 0.1 percentage points lower than in the previous vintage of the forecast.

According to the most recent rapid estimates of economic growth by GeoStat, in November 2015 the Georgian economy increased by 5.3% compared to the same month the year before. The 5.3% increase represents the highest growth rate in nearly 15 months. This optimistic outcome should, however, be treated with a degree of caution.

The Russian ban on Turkish goods turns out to be a boon for Georgian consumers. As Turkey is shifting its surpluses to the Georgian market, the prices of fruits and veggies are plummeting.