“In December 2022, annual inflation in Georgia was 9.8%, and compared to November 2022, prices decreased by 0.3%. Inflation in Georgia has passed its peak period and has been declining in recent months,” reads the latest Monthly Review of the National Bank of Georgia (NBG) for January 2023.

Pursuant to the report, “prices for goods on international markets are still at a high level, but in recent months there has been a certain stabilization and a downward trend, which, together with the strengthening of Georgian lari and the tightening of monetary policy, should help reduce inflation in Georgia.

In December, compared to the previous month, the most noticeable was 6% decrease in gasoline prices, which reduced monthly inflation by 0.2 percentage points. A 2% increase in cigarette prices increased inflation by 0.1 percentage points.

Rising food prices contributed 4.8 percentage points to annual inflation in December. Out of these, the increased prices for bread, cheese and potatoes stand out in particular. The contribution of these products amounted to 2.0 p.p. In recent months, fuel has gradually become cheaper. At the same time, the contribution of fuel to inflation also decreases. In December, this indicator fell to 0.1 percentage points.

Core inflation, which excludes highly volatile food, energy and cigarette prices from the consumer basket, was below headline inflation at 6.8%.
The decrease in inflation is largely due to the decrease in imported inflation. In recent months, imported inflation tends to decrease, which is facilitated by a certain stabilization of prices for salable products in international markets and a decrease in international transportation costs, as well as a strengthening of Georgian lari. In December, imported inflation dropped to 5.5%.

Inflation of locally produced products is high and amounts to 13.8%. On the one hand, high local inflation is related to an increase in the cost of food products (bread, cheese, meat), and on the other hand, with an increase in the cost of services, the most important of which is the increase in rent (contribution to inflation by 0.7%) and notary fees (0.3 p.p.),” the report concludes.