Consumer price inflation in Armenia continued to fall in 2012, reaching the lowest level since 2005, according to the latest government data released on Friday.
The National Statistical Service (NSS) reported an annual inflation rate of 2.6 percent , which is well below the maximum target rate of 5.5 percent that was set by the Armenian authorities a year ago. The figure was also sharply down from price increases registered by the NSS in 2011 and 2010.
The NSS data shows that the 2012 consumer price index was primarily pushed up by the rising cost of consumer goods other than food. They were up by 4.6 percent. By comparison, food prices rose by only 2 percent, according to the government agency.
Gurgen Martirosian, a senior NSS official, said strong growth in agriculture was the main factor behind falling inflation. “It boosted supply and strongly contributed to the overall price reduction,” he told reporters.
Armenia’s agricultural output rose by over 8 percent in January-October 2010 mainly because of favorable weather conditions that cut retail prices of domestically grown fruits and vegetables.
“In Armenia agricultural products have the greatest impact on the inflation rate,” said Samvel Avagian, an economic analyst. “Inflation here depends on weather conditions. This year conditions were good.”
Still, Avagian questioned the NSS’s methodology of measuring inflation, saying that the share of agricultural products in the consumer price index is too high. “Life is becoming more expensive faster, and people feel that,” he told RFE/RL’s Armenian service (Azatutyun.am). “The [official] consumer price index does not always reflect the cost of life.”