Core Inflation in Georgia: What the Headline Rate Doesn’t Tell Us

When inflation is discussed, most people focus on a single number — the monthly or annual rate that shows how much the cost of living has changed overall. But for economists and central banks, another number often matters more: core inflation. This indicator attempts to strip out short-term price shocks and volatile items to reveal more stable trends. According to Georgia’s National Statistics Office (source: Geostat), core inflation stood at just 2.3% in April 2025, significantly below the headline annual inflation of 3.4%.

Core inflation excludes categories like food, energy, regulated tariffs, and parts of transport — components that tend to be the most unstable due to market swings, seasonal effects, or global developments. The goal is to isolate underlying price dynamics that are more persistent and less reactive to temporary factors, making it a preferred metric for monetary policy decisions.

However, the irony is that these excluded categories are precisely the ones that matter most in people’s daily lives. In the past year, prices for basic goods like vegetables, cooking oil, and tea surged — in some cases by over 15%. For low- and middle-income households, where food expenses make up a large portion of monthly spending, such increases have a real and immediate impact. Core inflation doesn’t capture this pain.

On the other hand, the relatively calm core inflation suggests that the broader economy is not overheating. Prices for categories like clothing, education, or entertainment have remained relatively stable, indicating no widespread inflationary pressures that would force aggressive action from the central bank.

The result is a dual narrative: one told by statistics and policy — where inflation looks manageable — and another experienced at the supermarket and pharmacy, where many feel financial strain. Both numbers are technically correct, but they reflect different realities and serve different purposes. The question is: which one better describes the economic experience of the average Georgian?