Page 18 - GEORptFeb21

4.2​ Inflation 4.2.1​ CPI dynamics
Inflation eases to 2.4% y/y in Georgia on subsidised regulated prices
Consumer prices dropped on average by 1% in December while the annual inflation rate eased to 2.4% y/y in the month from 3.8% y/y in November as utility prices dropped, pulled down by subsidies extended by the government.
Prices for housing, water, electricity, gas and other fuels posted a 22.0% decrease in the month, which cut 1.89 pp from the monthly inflation rate.
In annual terms, the prices in these categories decreased overall by 21.7% y/y, making a 1.94pp negative contribution to the overall dynamics of consumer prices.
Utility prices were lower in December for the following subgroups: water supply and miscellaneous services relating to a dwelling (-36.5% m/m, -36.5% y/y) and electricity, gas and other fuels (-30.2% m/m, -30.1% y/y). This change was attributable to an ordinance of the government on subsidising utility fees. Households using under 200kWh in December, January and February will have their bills fully subsidised from the budget under the ordinance.
With regard to annual core inflation, prices increased by 5.3% y/y in December, while annual core inflation without tobacco amounted to 4.9% y/y.
Food prices remain the main inflationary driver in Georgia.
The prices of food and non-alcoholic beverages increased by 2.1% m/m in December, contributing 0.69 pp to the overall monthly inflation rate. The prices were higher for the following subgroups: vegetables (6.5%), milk, cheese and eggs (4.2%), fruit and grapes (3.8%), oils and fats (3.5%) and fish (1.9%).
In annual terms, food prices were 6.8% higher in December, contributing 2.19 pp to annual inflation.
Transport fares increased by 2.4% m/m in December, contributing 0.26 pp to overall monthly inflation. In annual terms, however, transport fees were 2.3% lower, reflecting in a negative 0.28pp contribution to annual inflation.
18​ GEORGIA Country Report​ February 2021 ​ ​www.intellinews.com