Will Armenian authorities be able to suppress inflation?

Prices for foodstuffs continue growing in Armenia.

The main event of the past week was World Economic Forum in Davos, which brought together heads of state or government and entrepreneurs from all around the world. Business leaders tackled topics like globalization, social network addiction, burn-out and the economic rise of India and China.

PanARMENIAN.Net - Although Armenia was not participating, it is also concerned about sustainable development. According to the National Statistical Service, the Armenian GDP totaled AMD 3509,5 bln, with the growth estimated at 2,6% in 2010. The consumer prices went up 8,2% compared to 2009.

Reduction of Armenia’s state budget deficit will allow for 5-5,5% inflation in 2011 against 9,4% registered in 2010, according to Armenian Finance Minister Vache Gabrielyan.

Armenia went thorough a supply shock in 2010. To cope with the situation, the Finance Ministry and Central Bank aim to take steps to ensure the offer. In particular, the Ministry of Finance will decrease state budget deficit, which, by the year 2013 will comprise less than 3% against 7,5% in 2009 and ± 5 in 2010.

Armenia’s state debt totaled $3bln 795mln, what is 44.4% of the GDP. The average monthly salary totaled AMD 108 852 in Armenia in January-December 2010, increasing by 6,7 % compared with the same period of 2009. 26,6% increase was observed in December compared to November 2010. Meanwhile, 3,4% and 6,7% growth was recorded in salaries of budgetary and private organizations, totaling AMD 87 807 and 135 688 respectively. The number of unemployed totaled 78800 in January-December 2010, dropping by 6,7% as compared with the same period in 2009. 1,4% drop was recorded in the monthly unemployment rate.

According to Mr. Gabrielyan, the state debt will remain unchanged in 2011 and 2012 but will reduce starting 2013. “We control the state debt and experience no problem with its servicing, as we have various sources of financing,” he said.

The that tax return to the Armenian state budget totaled AMD 591.9bln against the planned AMD 570bln in 2010.

Meanwhile, prices for foodstuffs continue growing. People are specifically worried by the rise in prices for bread.

Parliamentary opposition label the inflation suppression model, which is currently applied in Armenia, as inefficient.

Victoria Araratyan / PanARMENIAN News
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