In February, the average cost of cooking one standard Imeretian Khachapuri fell to 3.29GEL, which is 3.4% lower month-on-month (compared to January 2015), and 4.8% lower year-on-year (compared to February 2014).
The main ingredient of Khachapuri is Imeretian cheese, and, naturally, its price is the main driver of ISET’s Khachapuri Index. Over the years, we have been observing a sharp upward movement in the price of cheese from July till January, and an equally sharp downward movement from February till June.
These seasonal price dynami...
ISET Economist Blog
A blog about economics in the South Caucasus.
Mar
10
Mar
06
Unlike most commodities that are provided by private actors competing with each other, a currency is provided by a monopolist. The only institution that is allowed to produce laris is the National Bank of Georgia (NBG).
The task of the NBG-monopolist is made difficult by various peculiarities that cannot be found in other markets. First of all, lari once injected into the economy are not consumed or used up. They remain in the economy “until the cows come home”, as they say in Scotland. This is starkly different to what we observe in most other ma...
Mar
04
The recent bouts of sharp lari depreciation caused much anxiety among the Georgian population, prompting fears of inflation, loan defaults, and bank failures, on the one hand, and the typically Georgian political speculations over “who is to blame”, on the other.
In and of itself, a moderate lari depreciation is not necessarily a bad thing for the Georgian economy. It makes Georgia cheaper and more competitive relative to the rest of the world, reducing the current account deficit and carrying a promise of future investment and jobs. That said, a deep an...
Feb
27
Foreign direct investment (FDI) is critical to every developing county, and Georgia is no exception in this regard. Georgia wants to grow out of poverty and catch up with the economically more developed regions of the world – for this to happen, foreign resources are needed, in particular if the domestic savings rate is as low as in Georgia.
Yet FDI is not only about the capital which is made available to the economy but also, and even more importantly, about trust foreigners have into the Georgian economy. It is one thing to make cheerful statements abo...
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