Teona Chalidze: “Prices on staple foods have increased by 14% as compared to the previous year and utilities and transportation costs have also gone up.”
Verdict: FactCheck concludes that Teona Chalidze’s statement is TRUE.
Resume: The annual inflation rate in July 2021 was 11.9% higher as compared to the previous month. In a year, prices in the food and non-alcoholic beverages group increased by 14.1%. The price increase was 22.5% for transport and 11.4% for accommodation, water, energy and natural gas.
The current statistics on domestic household income include data before 2020 and, therefore, analysing 2021’s dynamics based on official data is currently impossible. However, of note is that the population’s average monthly real incomes have been decreasing since 2016 whilst the population’s nominal monthly incomes, let alone real incomes, have dropped from GEL 1,250 to GEL 1,195 given the pandemic-induced crisis in 2020. The average real monthly incomes per domestic household and per capita also decreased in 2020 as compared to 2019. Since 2013, there has not been a single category of nominal incomes with a 12% annual growth. Therefore, most likely, the population’s real incomes have also not increased in the period under review (July 2020 – July 2021).
Teona Chalidze, in her interview with FactCheck, clarified that the claim about incomes in her statement was based on information about the general situation. Although we believe that Ms Chalidze’s assessment on incomes is close to the truth given the past trends of income changes, FactCheck does not assess that part of the statement for the purpose of a verdict given the lack of updated official data which could be referenced and only offers an analysis. The other part of Ms Chalidze’s statement in regard to price growth does correspond to the reality.
Analysis
Member of the civic platform, New Georgia, Teona Chalidze, stated: “Prices on staple foods have increased by 14% as compared to the previous year and utilities and transportation costs have also gone up. In this light, there is no income growth whatsoever for the people.”
As a result of inflation, money’s purchasing power declines over time and less goods and services can be purchased with GEL now as compared to previously. Consumer price inflation is measured by the Consumer Price Index which includes prices for 12 large food groups. These groups are as follows: 1) food and non-alcoholic beverages, 2) alcoholic beverages and tobacco, 3) garments and footwear, 4) accommodation, water, energy and gas, 5) furniture, household items, house repair, 6) healthcare, 7) transport, 8) communication, 9) vacation, leisure and culture, 10) education, 11) hotels, cafes and restaurant and 12) different goods and services.
In July 2021, the monthly inflation rate was 1.3% as compared to the previous month whilst the annual inflation rate reached 11.9%. The yearly inflation rate in the foods and non-alcoholic beverages group was 14.1% which affected the yearly inflation by 4.43 percentage points. The prices have gone up in sub-groups as follows: oil and fats (48.0%), vegetables and melons (35.4%), sugar, jams and other sweets (18.1%), milk, cheese and eggs (15.4%), bread and bakery products (12.4%), fish (11.5%), mineral and spring water, non-alcoholic beverages and fresh juices (10.4%), meat and meat products (5.3%) and coffee, tea and cocoa (4.7%). Prices in the transport group increased by 22.5% and by 11.4% in the group of accommodations, water, energy and gas. According to the information of the National Bank of Georgia, the rising inflation in Georgia is closely related to price hikes on products for mass consumption, particularly on food.
The statistics for domestic household incomes as published by the National Statistics Office of Georgia need to be taken into account. The current statistics include data before 2020 and, therefore, any analysis of 2021’s dynamic is currently impossible. However, of note is that the population’s average monthly real incomes have been decreasing since 2016. The average real monthly incomes per domestic household and per capita also decreased in 2020 as compared to 2019. Since 2013, there has not been a single category of nominal incomes with a 12% annual growth. Therefore, most likely, the population’s real incomes have also not increased in the period under review.
Table 1: Population’s Average Monthly Incomes in 2012-2020
Source: National Statistics Office of Georgia
