ISET

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.

In January 2020, the cost of cooking one standard Imeretian khachapuri continued to increase, ranging from 4.21 GEL (Kutaisi) to 4.38 GEL (Batumi), with the average cost being 4.30 GEL. The new average price is 18.3% higher than the price in January 2019. While in month-on-month development, the khachapuri price is 0.7% higher than December 2019.

The yearly price increase is driven largely by the deprecation of the Georgian lari against the US dollar. The GEL/USD exchange rate reached 2.88, 0.22 points higher than the previous year (January 2019). The depreciation of the lari also put upward pressure on the price of imported khachapuri ingredients, such as imported milk powder (a fresh milk substitute), butter, and wheat.

Just like every Georgian family, ISET Policy Institute is preparing for the New Year, and we keep to our traditions and have cooked up a New Year Supra Index for our readers. The Index shows the cost of a standard festive supra meal for a family of five to six people in every Georgian region. The traditional dishes included in our calculations are: mtsvadi, satsivi (chicken in walnut sauce), khachapuri, trout, tabaka (fried) chicken, olivie salad, pkhali, cucumber&tomato salad, and for the desert, fruit and gozinaki (caramelized walnuts fried in honey).

The Khachapuri Index continued its upward trend in November 2019, with the average cost of cooking one standard Imeretian Khachapuri reaching 4.1 GEL. This is 6.1% higher month-on-month (compared to October 2019), and 12.6% higher year-on-year (compared to November 2018).

The increasing price trend was not surprising as, in general, an increase at this time of the year is driven by a seasonal decline in the supply of fresh milk and excess demand before the fasting period. This also leads to corresponding increases in cheese and other milk product prices. However, the yearly price increase is driven largely by the deprecation of the Georgian lari against the US dollar. Prices went up YoY for all locally produced goods (eggs and cheese), for imported goods (yeast and butter), and for those that use imported intermediary inputs in production (flour and milk powder).

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