Where is the “historical” level of prosperity?

One of the key indicators of prosperity is a society’s ability to withstand and overcome socio-economic challenges. Today, we are all facing a significant rise in prices, which is reflected in official statistics. But how effectively are we managing this?

In July of this year, the consumer price index stood at 3.4%. While this figure falls within the Central Bank’s target inflation range, it is important to understand that an aggregated, average indicator is one thing, and its breakdown across specific categories of goods and services is quite another. Prices for essential services continue to climb, as do those for basic necessities—some of which have seen double-digit increases.

For example, food prices rose by 4.4% over the year. Specifically, butter increased by 12.6%, vegetable oil by 16.8%, and bread by 4.4%. The rise in vegetable prices—despite increased agricultural output—points to institutional problems within the sector. Among the causes of inflation, poor management and so-called “reform” measures play a significant role. For instance, changes to the tax system that shifted certain services from preferential to general taxation led to price hikes. The 11.6% increase in personal services is a direct result of these changes.

Returning to the topic of prosperity, it is crucial to assess how well society is coping with inflation. Since 2020, we have been living under conditions of sustained price growth. But have household incomes been indexed proportionally to inflation? Statistics on average wage growth don’t address the broader social issue, as significant salary increases have been observed in fewer than 10% of workers—primarily in select sectors—leaving the majority of the population behind.

There is another, more telling statistic: while bread prices rose by 4.4% and butter by 12.6% over the year, the average pension in the country actually declined. In July 2024, the average old-age pension was 49,807 drams; by July 2025, it had dropped to 49,557 drams. The decrease may seem minor, but the fact itself speaks volumes.

So where, in this picture, can we find that “historical” level of prosperity?