Inflation decreasing, the authorities say

The state statistical department informs us that inflation is decreasing. In August it was 12.8%, in September it fell to 10.6%, in October to 7% and in November to 6.3%.

The inflation tendency is determined by the decrease in world fuel prices. For instance, this immediately created a fall in the bread price in Georgia. Certain economic analysts however think that official statistics are not reliable and criticize how the inflation rate is calculated.

The methodology for the calculation of inflation should be beyond criticism, thinks Niko Orvelashvili. Some consider that the consumer basket used to calculate inflation include products which are not used by most of the population, thus skewing the real inflation consumers experience.

Inflation prognoses for 2009 differ. The Ministry of Finance predicts 7%, the NBG 9%. Independent analysts, such as former Minister of Economy and MP Lado Papava, think neither figure is realistic.