Wednesday, November 14, 2007


There are statistics, and there is experience.

In Georgia, where inflation since last December is reported to be 6.2% according to the statistics office, the experience feels different. In my favourite Adjarian khachapuri restaurant first they slapped on a 10% service charge, and now the smallest khachapuri is noticeably smaller. Another place selling take-away khachapuris has slapped 20% on them. Theatre and concert tickets have gone up, too. With other food it is difficult to tell - fresh food changes seasonally every week, and sometimes I pay the foreigners' prices, too. But of course gas etc have gone up considerably. I also hear that the price of flour has gone up, but the government has not allowed for the price of bread to rise - a wise move in view of last week's unrest.

In Lithuania, too, price increases keep rising, with an inflation rate of 7.6% in the year to October 2007 (compared to an upper limit for Euro membership of 2.6%). We'll have no chance to join the Euro (though thankfully the currency is fixed to that already). My mortgage interest rate is below the inflation rate - does that mean I am making money? I don't know. Opera ticket prices in particular have doubled over the last few years, as have some concert prices. Then there are nasty tricks such as putting 2 litai on each ticket you buy, even at one concert hall. Restaurants have increased their charges considerably, and I notice the prices of milk and bread have increased a lot, too. The service charges for my flat seem to have doubled recently. Of course in the last 6 years the minimum wage has increased from 450 lt to 700 lt, and many of the public sector workers, and pensioners, get considerably higher incomes - I hope that for them there is a real increase in ability to spend (or save) and that they are not earning more and buying less.

I wonder where it will end and whether Lithuanian prices, and incomes, will have to approach the EU average before it all stops. If incomes got there, then at least many of the expatriates would maybe return...