Consumer prices in Armenia fell further this spring, putting the authorities in a stronger position to meet their inflation target for 2012, according to official statistics released on Thursday.
The National Statistical Service (NSS) recorded a year-on-year inflation rate of just 0.5 percent in May, sharply down from 3 percent in February and 4.7 percent in December. Finance Minister Vache Gabrielian cited the “quite low” figure during a cabinet meeting chaired by Prime Minister Tigran Sarkisian.
The Armenian government’s target rate for this year is 4 percent (±1.5 percentage points).
The NSS data shows that inflation eased significantly in May because of a 1.3 percent drop in the consumer price index. The average price of foodstuffs was down by 2.4 percent from the April level. A seasonal rise in agricultural production appears to be the main factor behind that decrease.
“I don’t think that this seasonal deflation is the right criterion to describe the economy,” Ara Galoyan, an economic analyst, told RFE/RL’s Armenian service (Azatutyun.am). He also called into question the credibility of the official inflation figure, saying that the actual cost of life in the country is probably higher than what the NSS figures indicate.
Galoyan predicted that inflation will rise again already this month because of the renewed depreciation of the Armenian dram.
The national currency has lost more than 4 percent of its nominal value against the U.S. dollar in the last few weeks. This should push up the cost of key imported foodstuffs such as wheat and sugar.