The bread index: a robust measure of inflation in Georgia

The International School of Economics at Tbilisi State University tracks inflation and the cost of living across Georgia’s major cities using the bread index. To be more precise, or more Georgian, it used the Khachapuri Index. Khachapuri is traditional Georgian bread – and to track inflation, ISET uses a simple and robust formula. It includes the prices of only those ingredients that are needed to cook one Imeretian khachapuri – cheese, butter, flour, yeast, eggs, and milk – plus the cost of energy inputs – gas and electricity. Monthly costs track the fluctuations in prices in the major cities of Tbilisi (the capital), Kutaisi, Batumi, and Telavi. With bread being a staple food, the price can be compared each year.

From May 2010 to May 2011 the inflation in food prices (the Khachapuri Index) increased by 19.7% (from -3.1% to 14.3%). During the same period, the Consumer Price Index (CPI) increased by 14.3%. CPI measures changes in the price level of consumer goods and services purchased by households.

The reason for the difference is that Georgia imports much of what it consumes, including agricultural goods. Georgia only produces 5%-10% of its total wheat consumption and imports 600-700 tons of flour and wheat each year. Over the past year, the price of wheat has increased by 43%. This has resulted in the Khachapuri Index rising much more than the CPI Index. Bread prices have increased significantly, thus placing a burden on families, especially those in the lower income bracket.

In the light of Russia’s devastating wildfires in July 2010 and the loss of wheat production, Russia placed a temporary halt on exports, which was lifted only last month in May 2011. The halt on exports greatly affected Georgia. Georgia has to re-think its wheat production strategies. Almost 60% of Georgia’s wheat is imported from Russia, with the remaining 35% from Ukraine and Kazakhstan. The Government of Georgia plans to increase wheat production from 5%-10% to 30%-35% by 2012. Now the situation is becoming more urgent as the cost of bread continues to rise.

President Mikheil Saakashvili has called for an end to wheat dependency on a single supplier and a single source, and an end to the reflection of bread prices on price fluctuations internationally.

(http://www.iset.ge/)

Comments

Pir-E-Kamil - The Perfect Mentor by Umera Ahmed: book review

The Perfect Mentor pbuh (2011) is set in Lahore and Islamabad in Pakistan. The novel commences with Imama Mubeen in medical university. She wants to be an eye specialist. Her parents have arranged for her to marry her first cousin Asjad. Salar Sikander, her neighbour, is 18 years old with an IQ of 150+ and a photographic memory. He has long hair tied in a ponytail. He imbibes alcohol, treats women disrespectfully and is generally a “weird chap” and a rude, belligerent teenager. In the past three years he has tried to commit suicide three times. He tries again. Imama and her brother, Waseem, answer the servant’s call to help Salar. They stop the bleeding from his wrist and save his life. Imama and Asjad have been engaged for three years, because she wants to finish her studies first. Imama is really delaying her marriage to Asjad because she loves Jalal Ansar. She proposes to him and he says yes. But he knows his parents won’t agree, nor will Imama’s parents. ...

Flaws in the Glass, a self-portrait by Patrick White: book review

The manuscript, Flaws in the Glass (1981), is Patrick Victor Martindale White’s autobiography. White, born in 1912 in England, migrated to Sydney, Australia, when he was six months old. For three years, at the age of 20, he studied French and German literature at King’s College at the University of Cambridge in England. Throughout his life, he published 12 novels. In 1957 he won the inaugural Miles Franklin Literary Award for Voss, published in 1956. In 1961, Riders in the Chariot became a best-seller, winning the Miles Franklin Literary Award. In 1973, he was the first Australian author to be awarded the Nobel Prize for Literature for The Eye of the Storm, despite many critics describing his works as ‘un-Australian’ and himself as ‘Australia’s most unreadable novelist.’ In 1979, The Twyborn Affair was short-listed for the Booker Prize, but he withdrew it from the competition to give younger writers the opportunity to win the award. His autobiography, Flaws in the Glass...

Sister cities discussed: Canberra and Islamabad

Two months ago, in March 2015, Australia and Pakistan agreed to explore ways to deepen ties. The relationship between Australia and Pakistan has been strong for decades, and the two countries continue to keep dialogues open. The annual bilateral discussions were held in Australia in March to continue engagements on a wide range of matters of mutual interest. The Pakistan delegation discussed points of interest will include sports, agriculture, economic growth, trade, border protection, business, and education. The possible twinning of the cities of Canberra, the capital of Australia, and Islamabad, the capital of Pakistan, were also on the agenda (i.e. called twin towns or sister cities). Sister City relationships are twinning arrangements that build friendships as well as government, business, culture, and community linkages. Canberra currently has international Sister City relationships with Beijing in China and Nara in Japan. One example of existing...

FEAST OR FAMINE

Search This Blog