Expanded Summary

The standard of living of a population is measured by the consumer basket. Without analyzing this measure, it is impossible to discuss the level of economic development of a country. Food accounts for the largest share of the consumer basket of developing countries, followed by other important products and services. The more economically sustainable a country is, the larger portion of its population's consumer spending is directed toward entertainment, recreation, and dining out. According to IMF research, the median share of food in the consumer basket of developing countries is 31%, compared to 17% in developed countries.

The purpose of this article is to analyze the consumer basket of Georgia. Tables indicating the shares and origins of products in each category are provided. Empirical analysis of these tables shows that, over the last 13 years, the largest share of consumption has been allocated to goods and services essential for modern life, including food, transport, healthcare, and housing. A concerning issue is that, after meeting essential needs, the consumption of alcoholic beverages and tobacco is a leading category, while education, which is crucial for the development of the real sector of the economy and should receive the greatest attention, ranks ninth. It falls behind categories such as recreation, entertainment, amenities, and various goods and services. This highlights the low level of economic development in the country and hinders its progress.     

In comparison, the common consumer basket of EU member states allocates 21.4% less to these four essential categories as of 2023, compared to Georgia. Additionally, healthcare occupies 1.88 times and education 4.6 times less space in the EU's consumer basket, which is explained by the fact that EU citizens receive these services either for free or at a very low cost.   

Due to the consumer-oriented nature of Georgia's economy, the share of local production does not increase in any category, except for those where imports are nonexistent, such as education and services provided by hotels, cafes, and restaurants. Moreover, the share of imports has not decreased in any category over the years. Regarding the overall indicators for the entire consumer basket, the situation is even worse than in individual categories.

The article identifies several shortcomings in Georgia's consumer basket that hinder the development of the country's economy. These issues can be addressed through coordinated and purposeful efforts by both the government and the population. While it is understandable that essential goods and services dominate the consumer basket, it is troubling that education is ranked last, in ninth place, behind categories such as entertainment, recreation, alcohol, tobacco, and amenities. This situation illustrates the severity of the problems facing the country and how the population's consumption patterns may contribute to hindering its development. Furthermore, as an import-dependent country, Georgia's consumer basket relies heavily on imports, and unfortunately, this trend has not decreased over the years. Based on statistical data, there is little prospect of increasing the share of local production in Georgia's consumer basket. 

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