Prime Minister Hovik Abrahamian on Thursday ordered Armenia’s anti-monopoly regulators to crack down on businesses that he said have disproportionately raised the prices of key goods to cash in on sharp exchange rate fluctuations.
“In particular, yesterday there were sizable increases in the prices of sugar, flour and a number of other basic consumer products [imported to Armenia,]” Abrahamian said at a cabinet meeting which was attended by Artak Shaboyan, the head of the State Commission on the Protection of Economic Competition (SCPEC).
“I am calling on you to treat these abuses with utmost strictness. The government will not tolerate baseless price hikes,” he told Shaboyan. He said the PSRC should submit its findings to the government on a daily basis.
Abrahamian also instructed Health Minister Armen Muradian to investigate similarly sharp increases in the retail prices of medicines. He complained that some drug prices have shot up by as much as 40 percent this week.
Key foodstuffs imported to Armenia became more expensive even before the depreciation of the Armenian dram dramatically accelerated on Monday and Tuesday. Shaboyan told the government last week that the cost of flour, sugar, poultry, eggs, butter and cooking oil has risen by between 2 percent and 13 percent. He described that as an inevitable consequence of the weaker dram.
The Central Bank of Armenia estimated last week that the price rises will push up inflation by up to 2 percentage points this year. But it said the annual inflation rate will remain within the Armenian authorities’ target band of 4 percent (±1.5 percentage points).
Later on Thursday Abrahamian visited some supermarkets in Yerevan to talk to their staff and buyers and receive first-hand information about food prices. “If the dollar’s exchange rate changes by 10-15 percent a product cannot become 30 percent more expensive,” he told reporters at one of those stores. “I’m sure people have realized that they can’t play such games with our people.”
“People must not be tempted. They must not use such situations to clinch more money from our people. After all, they are our compatriots and the government is responsible for them,” the premier said. He declined to name any of those businesses.
Imports of basic foodstuffs and fuel to Armenia have long been controlled by a handful of wealthy businesspeople close to the government.