Economist Armen Grigoryan

Inflation Continues to Increase in Armenia

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YEREVAN — After the Russian-Ukrainian war, a large influx of tourists to Armenia began due in part to the restrictions of European countries. While Armenia might be able to use the opportunity to develop and stabilize its weak economy to some extent, as last week showed, everything in Armenia also became more expensive during the influx of Russians, and this created additional problems for ordinary Armenian consumers. In particular, the prices of sugar, oil, bread and other important products have risen.

Inflation has increased in unbelievable proportions in the Armenian real estate market. For example, there are already houses in Yerevan for which the owner demands $6,500 in monthly rent.

Economist Armen Grigoryan told the Armenian Mirror-Spectator that what is happening is not normal and can have bad consequences. He declared: “Yes, it is good that there is commerce, but everything is excessive and the ordinary citizen suffers from it. I think the state should somehow deal with all this and regulate it, because this can also drive away tourists.”

The Russian tourists we met on the street appeared sincere. They think that Armenia is a very good country, but everything is very expensive. Ivan Tomachkov said, “Your country is unique, to be honest, but I do not understand why everything is so expensive.”

Anna Bunina, who came here with her family, said she was most surprised by the thousands of fountains, which flowed 24 hours non-stop. Despite this admiration, she also complained about the high price of food.

“But,” she exclaimed, “what the devil! What extreme prices there are for everything here! It’s the end of the world.”

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Minister of Economy of Armenia Vahan Kerobyan assesses the situation differently. On his Facebook page, he called on citizens not to panic, declaring:

“I am notifying [you], in connection with the information disseminated in the Russian and Armenian media over the last two days, according to which it is planned to restrict the export of a number of food products from Russia to the EEU [Eurasian Economic Union] countries, that the food security issues of Armenia are under the direct control of the Armenian government. So far, the Russian government has not approved a decision to ban the export of food products, so the import of goods to Armenia is carried out normally.

“There is currently no projected deficit in the Republic of Armenia in terms of products included in the minimum food basket. We are in touch with our Russian partners and even in the event of a decision by the Russian government on possible export restrictions, the Republic of Armenia has all the necessary resources to ensure the food security of the population. The grain self-sufficiency of the Russian Federation is at about 150 percent, which means that Russia has sufficient resources for domestic consumption and export. We call on citizens not to cause panic and not to make unnecessary purchases.”

It should be noted that the price of flour has already risen in Armenia, as a result of which pastry and pasta products have also increased in price.

Economist Arthur Tovmasyan writes: “Wheat has risen in price by 20-30 drams. A 50-kilogram bag of flour increased from 12,600 drams to 13,400 drams, which is an increase of about 6-7 percent. All bakery products will in increase in price due to the rise in these prices. The annual demand for grain in Armenia is about 980 thousand tons. The demand for wheat alone is about 460 thousand tons, of which about 80-85 thousand tons were produced annually by Artsakh. Armenia and Artsakh together produced about 600,000 tons of grain (about 57 percent of the total demand), and imports from abroad amounted to about 450,000 tons (43 percent). Our country and people may be facing a serious crisis and the elected prime minister and his woeful government are silent, or say, what next, we will not deviate from our path. They were saying, ‘If Artsakh did not exist, you would live well. How is it now? Are you living well? Is there a future, dear people?’.”

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