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. ...

The acacia thorn trees of Kenya

There are nearly 800 species of acacia trees in the world, and most don’t have thorns. The famous "whistling thorn tree" and the Umbrella Thorn tree of Kenya are species of acacia that do have thorns, or spines. Giraffes and other herbivores normally eat thorny acacia foliage, but leave the whistling thorn alone. Usually spines are no deterrent to giraffes. Their long tongues are adapted to strip the leaves from the branches despite the thorns. The thorny acacia like dry and hot conditions. The thorns typically occur in pairs and are 5-8 centimetres (2-3 inches) long. Spines can be straight or curved depending on the species. MARTINA NICOLLS is an international aid and development consultant, and the author of:- Similar But Different in the Animal Kingdom (2017), The Shortness of Life: A Mongolian Lament (2015), Liberia’s Deadest Ends (2012), Bardot’s Comet (2011), Kashmir on a Knife-Edge (2010) and The Suda...

Shindi: the Georgian Cornelian cherry

The Cornelian cherry – shindi in Georgian – is a fruit with medicinal and decorative properties. It was grown from ancient times, according to the International Society for Horticultural Science (ISHS). It is also commonly called the European cornel. It is native to southern Europe from France to Ukraine as well as Armenia, Azerbaijan, Georgia, Iran, Turkey, Israel, Lebanon, and Syria. The Cornelian cherry tree ( Cornus mas ) can be grown in orchards, but it is often seen in the forests of Georgia where it grows up to 1,350 metres above sea level. It is a medium to large deciduous tree, growing from 5-12 metres tall. The flowers are small with four yellow petals in clusters, which flower in February and March. The Cornus mas has three botanical varieties: (1) var. typica Sanadze with cylindrical red fruits, (2) var. pyriformis Sanadze with pear-shaped red fruits, and (3) var. flava vest with yellow fruits. The fruits are oblong red drupes about 2 centimetres ...

FEAST OR FAMINE

Search This Blog