Chairman of the RA NA Standing Committee on Financial-Credit, Budgetary and Economic Affairs, member of the ruling Republican Party of Armenia Gagik Minasyan said that 7.4% inflation rate recorded in January-July 2010 causes serious concerns, taking into consideration the global trends for growth in bread prices.

Armenia’s government has good mechanisms to keep the inflation rate within natural bounds and prevent some dishonest entrepreneurs from exploiting the situation and creating additional inflation pressure.

He added that the State Commission for the Protection of Economic Competition, Central Bank of Armenia and government have both obligations and levers to keep the inflation rate within 4±1,5% envisaged by the budget. “The inflation rate will reach 5.5% by the yearend,” said Minasyan.

According to him, despite the sharp decrease in GDP growth over the past two months, which amounted to 4% by the end of July, it will considerably exceed the 1.2% growth envisaged by the budget by the end of 2010. “The reasons behind decrease in GDP growth index are evident – significant drop in agriculture. Meanwhile, 11.4% increase was recorded in industry, what indicates a gradual change in the structure of Armenia’s economy,” said Minasyan.

At the same time he noted that the state budget incomes were AMD 10bln higher in January-July 2010 as compared with the same period of pre-crisis 2008.