Page 19 - GEORptDec19

slightly narrowed. The nominal weakening of the currency was steeper than consumer price inflation, which resulted in a gradual and moderate depreciating of the currency in real effective terms. Under such metrics, the lari in August arrived at its weakest position since mid-2010. In real effective terms, the currency weakened by 13.6% y/y as of August. But the trend data shows that the average real effective exchange rate over the past 12 months weakened by only 1.6% y/y.
Food prices have made the largest contribution by far to the rise in consumer prices as of September. They surged by 11.7% y/y, contributing 3.5pp to headline inflation.
Higher tobacco excises enforced at the beginning of the year pushed up alcoholic beverage and tobacco prices by 14.6% y/y, resulting in a 0.97pp contribution to overall inflation.
4.2.2​ PPI dynamic
Georgia’s PPI for industrial products up 6.4% y/y in June
Georgia’s Producer Price Index (PPI) for industrial products increased by 6.4% y/y in June, rising from 4.1% y/y in the previous month and 5.4% in March, according to the national statistics office.
It was the highest producer inflation since August last year as cost increased faster for manufacturing (6.1% rise in March) and electricity, gas, steam and air conditioning supply (1.4% in March). Moreover, prices rebounded sharply for mining and quarrying (5.3% in March).
On a monthly basis, producer prices rose 1.1% in March after showing no growth in February.
19​ GEORGIA Country Report​ December 2019 ​ ​www.intellinews.com