The economic slowdown of the closing months of 2014 continued in January 2015, with the growth of real GDP amounting to only 0.5%. ISET‐PI’s GDP forecast is not optimistic either, with GDP growth in the first quarter of 2015 expected to be 0.5% (see GDP Forecast). The 5% economic growth initially forecasted by the government of Georgia, the 5.5% predicted by the ADB and the 4.2% predicted by the EBRD in September 2014 each seem quite out of reach now.

Unlike most commodities that are provided by private actors competing with each other, a currency is provided by a monopolist. The only institution that is allowed to produce laris is the National Bank of Georgia (NBG).

The recent bouts of sharp lari depreciation caused much anxiety among the Georgian population, prompting fears of inflation, loan defaults, and bank failures, on the one hand, and the typically Georgian political speculations over “who is to blame”, on the other.

The lari depreciation has started to affect real estate market prices in Tbilisi. The average rental price for residential property has continued to fall, reaching a new historical minimum in February 2015.

The average cost of cooking one standard Imeretian Khachapuri in the first month of 2015 dropped to 3.40 GEL, which is 7.4% lower month-on-month (m/m, that is compared to the previous month), and 5% year-on-year (y/y, that is compared to the same month of last year).