Georgia reacted to the COVID-19 pandemic by immediately introducing aggressive measures. Closing international borders, declaring a state of emergency, shutting down public transportation, banning local travel and public gatherings, closing restaurants and shopping malls, and introducing a nighttime curfew—these are all instruments that were used by the country’s government and health authorities to stop the spread of the virus. As a result, the health system was not overwhelmed with COVID-19 patients.
The average cost of cooking one standard Imeretian Khachapuri in May 2020 stood at 4.18 GEL; 6.8% lower month-on-month compared to April. However, the Khachapuri Index did increase by 24.9% year-on-year (compared to May 2019). At this time of the year, the monthly downward trend in the Index is typically driven by a seasonal decline in cheese prices (due to the increased supply of fresh milk and a resulting lower demand for imported milk powder).
In April 2020 Consumer Confidence reached the lowest level ever recorded, driven by severe deterioration in expectations about the future. Notably, the present situation index component of CCI stands slightly higher than during the regional currency crisis and lari devaluation episode in May-November 2015.
In the past several months the world has been rocked by profound economic and social turbulence. The COVID-19 epidemic has forced many countries around the world into widespread emergency lockdowns. Economic activity plunged dramatically in February-March 2020, with rapid indicators showing strong contractions in retail, restaurant business, and passenger transport.
The Khachapuri Index reached a new historical high in February 2020. The Index continued its upward trend, reaching an average cost of 4.35 lari in February 2020. This is 1.3% higher than in January 2020 (m/m) and 22.9% higher when compared to February 2019 (y/y). The main contributors to the Khachapuri Index’s inflation since last year were cheese (36.5%) and flour (10.7%). Furthermore, as shown in the chart, the year-on-year price of all khachapuri ingredients—milk (3.7%), butter (2.5%), eggs (6.6%), and yeast (8%)—rose compared to February 2019.