By Atom MarkarianThe Armenian government has registered a 3.5 percent consumer price deflation during the first ten months of this year despite a dominant sense that the cost of life in Armenia continues to rise.
According to the National Statistics Service, the prices of key food products have dropped by an average of 6 percent while those of other goods and services have risen by 1.8 percent since last December.
The government and the Armenian Central Bank had pledged to keep the inflation rate within a 2.5 percent limit in 2005 after recent years’ substantial price hikes. However, their latest data are bound to be questioned by many Armenians who feel that the consumer price index keeps growing. Previous official figures showed average consumer prices rising by 5.4 percent in January alone.
Parliament speaker Artur Baghdasarian and several other lawmakers openly challenged the credibility of the official inflation figures during last week’s discussion of the 2005 budget at the National Assembly. But Finance and Economy Minister Vartan Khachatrian insisted that they reflect the real situation in the country.
“We can not invent a new methodology of measuring inflation for some deputies,” said Khachatrian. “The world knows only one methodology and we will stick to it.”
The Central Bank, for its part, believes that the reported low inflation vindicates its monetary policy which has contributed to the dramatic appreciation of the Armenian currency, the dram, against the U.S. dollar and the European Union euro. Critics, however, say the stronger dram has reflected negatively on Armenian exports and hit hard a large part of the country’s population which is dependent on hard currency remittances from their relatives working abroad.