According to data published by the National Bank of Georgia (NBG), annual inflation stood at 4.6% in February, whilst the overall price level rose by 0.2% compared with January.

The NBG reports that the prolonged above-target inflation, which has persisted since the second quarter of last year, in contrast to the 3.0% target, is primarily driven by rising food prices. These increases are largely attributable to base effects and external factors. In particular, rising food prices on international markets over the past year have further compounded domestic food inflation.

“Core inflation, which excludes food, energy, and tobacco prices from the consumer basket, remains below the 3% mark, standing at 2.4% as of February. That said, elevated gold prices on international markets and higher urban bus fares provided a modest upward nudge to core inflation. Services inflation, for its part, stood at 3.1% as of February. The fact that both core and services inflation remain close to target is indicative of the stability of long-term inflation expectations,” the National Bank’s report states.

The national bank further notes that within the monthly consumer basket, the most notable price increases in February were recorded for gold rings and urban public transport, together adding 0.2 percentage points to monthly inflation. Conversely, falls in the price of Imeretian cheese and chocolate offset this by a broadly equivalent margin.

“In annual terms, food price rises continue to exert the greatest upward pressure on inflation. In February, inflation for food and non-alcoholic beverages rose to 9.5%, accounting for 3.2 percentage points of the overall inflation rate. Of this, bread had the single largest effect (0.9 pp). Beef, Imeretian cheese, potatoes, and chocolate together contributed a further 1.1 pp. Among other categories, a 5.9% healthcare inflation is particularly notable, contributing an additional 0.5 percentage points to the overall inflation rate. The most significant downward contribution came from internet service charges (-0.12 pp). Annual price reductions in certain household appliances also exerted a dampening effect on inflation,” the NBG report notes.

As regards domestically produced goods, annual inflation reached 6.5% in February.

“The principal drivers of domestic inflation are prices for bread, meat, and cheese. Inflation for mixed-origin products rose to 6.2%, with the appreciation of gold making the largest single contribution, followed by notable contributions from oil, potatoes, and chocolate within this category. Annual deflation in imported goods stood at 0.7%, driven chiefly by falling prices for household appliances,” the National Bank stated.