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Statistics service feeds Georgia fables2011-07-09 15:10
Earlier this week Georgia's statistics service (GruzStat) announced the unseen 4% drop in inflation rate in June as compared to May, i.e. 10% annualized. The National Bank immediately promised that by the end of the year inflation won't go beyond 8%. This statement of the financial regulator puts in doubt competence of its employees that seem to see no difference between fundamental macroeconomic indexes and seasonal adjustments.
In may the annual inflation rate was 14,3% particularly facilitated by the incredible growth food prices - almost one third as compared to the previous month. The price of certain products like meat, for instance, grew even higher. Inability of the authorities to restrain increase in food prices with half of the population working in agriculture, demonstrates low competence and corruptness of officials in charge of economic policy in the country better than any statistical report.
"We responsibly state that the catastrophic inflation and record increase in meat prices are the result of irresponsible and incorrect economic policies of the government", - David Gamkrelidze, leader of the New Rights, said on the issue. The authorities do their best to set up artificial monopolies on the food market to bring prices up and squeeze all juices out of impoverished Georgians. "On the pretext of ensuring food security, Georgian parliament has prepared a special legal basis leaving two licensed slaughterhouses for the market's needs and thus bringing meat prices up to a catastrophic level", - David Gamkrelidze stated.
In these conditions even most convinced supporters of Saakashvili's regime began to grumble. As a result, the Georgian statistical service reported on "incredible" price fall in June stating that the food prices went down by 8,9% annualized and taking headline inflation down to 10%. As the GruzStat remarks, the most noticeable price cut was evidenced in fruit (28,6%) and vegetable (26,2%) segments. Sugar and sweets faced a 5,7% fall in prices. The National Bank immediately got hold of this bright statistics and promised to have the price growth at the level of "pitiable" 8% by the end of the year forecasting 6% for the next year. Will poor Georgian have a chance to get breath? It would be great but the reason why GruzStat omitted meat statistics is suspicious. Yet, this is not incidental.
"According to the Monetary Fund, Georgia is one of the countries that will face price growth in the future. There are two reasons for that - no progress in agriculture, and accordingly, high dependence on imports, as well as lack of a competitive market", - Guram Chakhvadze, deputy head of the budget and finance committee at the Georgian parliament reacted to the joyful news from GruzStat. This is a normal seasonal phenomenon, not a new tendency in economy. Even the statistics service acknowledges that fruit prices have grown by more than one third - 34,3% versus last year. Meat is simply not mentioned. As soon as seasonal stuffs are through, inflation processes will accelerate.
"By the end of summer and autumn seasons, despite all promises, it will be hard to arrive at a 6% inflation rate or even keep it at a 10% level Presumably, the inflation will get back to the previous level" - Giorgi Abashishvili, an economist from Ilia University is sure. - To avoid it the National Bank must launch anti-inflation activities like reduction in public expenditure, and this is unlikely".
Georgian authorities seize the slightest opportunity to convince the country's population that their economic policy is efficient inviting sly statistics for assistance. The trouble is that GruzStat's data are uneatable.