According to the National Bank of Georgia (NBG), annual inflation in March reached 4.3%, while the overall price level rose by 0.8% compared to February.

The NBG attributes this surge, amidst the tense geopolitical climate, ongoing conflict in the Middle East, and transportation disruptions, to a sharp increase in international oil prices. Consequently, fuel prices have been trending upwards globally, including in Georgia. The NBG notes that the inflation rise compared to the previous month was largely due to higher fuel prices. Moreover, the impact of these fuel price increases on overall inflation was only partially reflected in March’s data. Core inflation, excluding volatile food, energy, and tobacco prices, stood at 2.4% in March.

Furthermore, the National Bank reports that fuel was the most significant contributor to the increase in the consumer basket in March compared to the previous month. Fuel prices increased by an average of 5.1% and 10.6%, respectively, accounting for approximately 0.26 percentage points of the overall monthly inflation.

“In annual terms, food inflation remains the most affected by the overall rise in prices. However, compared to previous months, the contribution of food and non-alcoholic beverages has decreased. In March, inflation within this group reached 7.5%, accounting for 2.6 percentage points of the overall inflation. The most prominent items impacting this figure were bread, beef, and sunflower oil. Other notable contributors included gold rings (0.3 percentage points), cigarettes (0.3 percentage points), and healthcare (0.4 percentage points). The largest downward influence on inflation came from falling prices of household appliances, TVs, refrigerators, washing machines, and computers collectively, which reduced inflation by 0.3 percentage points,” the NBG states.

Concerning domestically produced goods, March recorded an annual inflation rate of 6.0%.

“Increases in bread, meat, and cheese prices drove the rise in local inflation. Inflation for mixed manufactured goods stands at 4.9%, with notable contributions from gold, oil, and chocolate. The relatively low inflation rate for imported products (0.5%) is largely due to technological factors, although imported inflation has edged up due to higher fuel prices compared to the previous month,” the National Bank explains.