While Georgia’s official inflation rate for June 2025 stands at 4%, economist Giorgi Khishtovani warns that this number does not reflect the full picture, particularly for low-income households, who spend a larger share of their income on food.
According to Khishtovani, what makes the inflation data especially “noteworthy” is that food and non-alcoholic beverage prices have surged by 10.1% year-over-year, marking the first time in many months that food inflation has crossed the double-digit threshold. This category alone contributes 3.34 percentage points to the total 4% inflation rate, meaning it accounts for more than 80% of the total inflation.
“This tells us that food inflation is disproportionately impacting the overall inflation figure,” writes Khishtovani. “It also reveals how differently inflation affects people depending on their income level and spending structure.”
Khishtovani outlines several scenarios showing how the inflation experience varies depending on how much of a household's income is spent on food:
- If 50% of a family’s expenses go to food, their personal inflation is closer to 6%.
- If 75% of expenses go to food, inflation rises to around 8.5%.
- If nearly 100% of household income is spent on food, the real inflation rate felt by that household is around 11%.
“It’s a situation similar to that of the average salary in Georgia,” he explains. “While the average salary may be reported as 2,200 GEL, only about 35% of the population actually earns that amount or more. Likewise, inflation is reported at 4%, but for many, it may be as high as 9% or more.”
Inflation in Georgia is measured using the Consumer Price Index (CPI), which tracks price changes across a basket of over 300 goods and services. Each item is weighted according to how frequently it is purchased. Since food and non-alcoholic beverages make up roughly 35% of the total CPI basket, sharp price changes in this category heavily influence the overall inflation figure.
However, Khishtovani warns that these weights are averages and do not reflect the real-life spending patterns of families with different income levels. In lower-income households, food can account for 70–90% of total expenditures, making them far more vulnerable to food-driven inflation shocks.
