Inflation Continues at Alarming Rate in Armenia

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YEREVAN — Inflation, which began to appear in Armenia in 2020, has become a serious problem currently, as a result of which daily the rates of poverty and emigration are increasing. In addition, minor crimes are emerging, reminiscent of the 1990s.

Inflation in Armenia has increased almost 8 percent compared to last year, which is a huge jump. Below are some examples that reflect the year-end price increases of 2021 compared to the end of 2020.

Food prices rose by 11.2 percent, household goods by 8.7 percent, leisure by 3.8 percent, utility bills by 1.3 percent, alcoholic beverages by 9.3 percent, clothing by 8.1 percent, entertainment by 3.2 percent, internet by 0.9 percent, transport by 9.1 percent, healthcare by 5.4 percent and education by 1.8 percent.

These figures, of course, have already changed during the first two months of 2022, unfortunately for the worse, because inflation has continued to increase.

The State Commission for the Protection of Economic Competition was established in Armenia to implement policy in the field of protection of economic competition. The first composition of the commission was approved in 2001. The main goal is to protect and encourage free economic competition, to provide the necessary environment for fair competition, to promote business development, and to protect the interests of consumers in Armenia.

The Commission is a member of the Interstate Council for Antimonopoly Policy of the CIS (Commonwealth of Independent States), the International Competition Network (ICN), and the CIS Interstate Council for Antitrust Policy’s Advertising Coordination Council.

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This commission is evidently not able to function properly under the current circumstances, and so some products have almost tripled in price. For example, eggs which sold for 30-40 drams in 2020 have reached 90-95 drams; that is, they have increased from approximately 40 cents US to almost 2 dollars in price.

The Armenian government attempts to find the causes of inflation in the context of global inflation. Economic experts confirm that inflation is extremely high and could pose serious economic risks. For example, Hrand Mikaelyan, an expert at the Caucasus Institute, believes that the current inflation has been influenced by the rise in world energy and mineral prices, the rise in world food prices, and that inflation has been “imported” to various developing countries, including Armenia.

“After 2003, the balance of Armenia’s foreign trade has changed drastically: the difference between exports and imports has significantly increased. Today, local producers are also dependent on foreign countries, as most of the raw materials and components for production are imported. Therefore, when the price of raw materials rises, so does the price of products,” said Mikayelian in an online article by Seda Hergnyan in Hetq this January.

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