The FINANCIAL — Statement — Nika Melia: “Under the Georgian Dream’s rule, prices on medication increased by 60%, on healthcare by 37%, on utilities by 17% and on food by 20%.”
Resume: In accordance with the National Statistics Office of Georgia’s data, in the past six years (in January 2019 as compared to January 2013), the inflation level reached 22%. In the same period, prices on medication and therapeutic instruments increased by 67.8%. The level of inflation in healthcarereached 36.8%. In the past six years, utility expenses increased by 26.1% which is largely related to the increased tariffs on natural gas and electricity. Prices on electricity, natural gas and in the sub-groups of other means of heating increased by 15.2%. In 2013-2018, prices on food and non-alcoholic beverages increased by 25.5%. As we see, inflation levels on certain groups of items are higher as compared to Nika Melia’s figures.
Analysis
United National Movement MP, Nika Melia, on air on the talk show,Pirispir, stated: “In the past years, prices on medication increased by 60%, on healthcare by 37%, on utilities by 17% and on food by 20%.”
In his interview with FactCheck, Nika Melia clarified that he had referred to the period under the Georgian Dream’s rule; that is, the past six years. The MP also specified that he had compared 2013 January data to that of 2019 January.
The Consumer Price Index (inflation) shows the changes in prices on goods and services. The CPI includes 12 product groups. It is possible to have the total inflation level within the margins of the targeted figure but also have significant growth or/and a decrease of prices on certain product groups.
Keeping the inflation level at 0% is not envisioned as part of the efforts to ensure the stability of prices. The National Bank of Georgia defines the targeted inflation level which reflects such a level of price changes which is the most appropriate for the current stage of economic development.
In 2013-2018 the annual inflation level was mostly within the margins of the targeted inflation level. The only exception was 2017 when the inflation level hit 6.7% which was largely stipulated by the one-off factor; that is, an increased excise tax rate.
In accordance with the National Statistics Office of Georgia’s data, the inflation level in January 2019 increased by 22% as compared to January 2013. In this period, the inflation level in the healthcare group (medical products, ambulance services, hospital services) reached 36.8%. Prices on medical products – medications and therapeutic instruments – increased by 67.8%. In the past six years, domestic utility expenses increased by 26.1% which is largely related to the increased tariffs on natural gas and electricity. Prices on electricity, natural gas and other means of heating increased by 15.2%. In 2013-2018, prices on food and non-alcoholic beverages increased by 25.5%. These figures do not fully match with Nika Melia’s numbers and, in most cases, the actual inflation level is even higher.
Of note is that in the past six years, prices increased the most – by 81% – on tobacco and alcoholic beverages. In the same period prices on garments and footwear decreased by 24%.
Graph 1: Price Changes in the past Six Years (January 2019 as Compared to January 2013)
Source: National Statistics Office of Georgia
Author – Teona Absandze
