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Recent weeks’ increases in the prices of key foodstuffs in Armenia are the inevitable consequence of a major depreciation of the national currency, the dram, state anti-monopoly regulators said on Thursday.

Artak Shaboyan, the head of the State Commission on the Protection of Economic Competition (SCPEC), said that the regulatory body has so far found no evidence of large food importers abusing their dominant positions in the market.

“The exchange rate fluctuations have had a direct impact on the prices of imported goods, which started rising from November 20. Price rises were then recorded in the markets for locally manufactured goods,” Shaboyan told Prime Minister Hovik Abrahamian and members of his cabinet.

Shaboyan addressed the cabinet meeting to present the findings of the SPEC’s ongoing monitoring of consumer prices, which began after the dram started weakening against the U.S. dollar a month ago. According to him, the prices of imported products such as flour, sugar, poultry, eggs, butter and cooking oil have risen by between 2 percent and 13 percent. The dram has weakened by more than 11 percent against the dollar in this period.

Armenian dairy companies have also raised their prices, citing the weaker dram. Shaboyan argued that they import large amounts of powdered milk in winter months because of a seasonal drop in domestic milk production.

Artur Javadian, the governor of the Central Bank of Armenia (CBA), said earlier this week that the price hikes will likely raise consumer price inflation by up to 2 percentage points. But he insisted that the annual inflation rate will remain within the Armenian authorities’ target band of 4 percent (±1.5 percentage points ).

Babken Tunian, an economic writer with the “168 Zham” newspaper, said that the increased inflation is already reduced the purchasing power of most Armenians. “All products are affected by sizable price increase,” he said. “The population is already feeling their impact.”

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