The Easter Effect on the Khachapuri Index

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The FINANCIAL — The average cost of cooking one standard Imeretian khachapuri in April 2019 was 3.47 GEL, and the Index lost 1.3% compared to the previous month (March 2019).Such a decrease was in line with anexpected seasonal declining trend, which is largely driven by a springtime adjustment to the price of milk and milk products.

Nevertheless, in annual terms (compared to April 2018), the Index actually increased by 5.5%. The reason behind this might well be the Easter effect.This year, the religious holiday was celebrated at the end of the April in Georgia. There is typically greater demand for cheese and milk products during the week prior to Easter.Thus, this increased demand during the prior week directly affects the price of cheese, the main contributor toinflation in the Khachapuri Index. Consequently, in April 2019, the price of cheese increased by 9.5%,compared to the same month of last year, while the price of flour and milk also increased by 7.6% and 1.7%, respectively.

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