Talking to RFE/RL’s Armenian Service on Monday, Vahan Kerobian said that the government is working on the creation of better conditions for the import of certain types of goods, such as meat, sugar and rice, that he said would lead to a certain decrease in the level of prices.
At the same time, the minister warned that a new global inflation wave is expected this year that will also affect agricultural products.
Kerobian said that during the latest meeting of the Intergovernmental Council of the Eurasian Economic Union, a Russia-led economic group of five post-Soviet nations, including Armenia, a number of decisions were made and one of them provides for the abolition of customs duties on a wide range of goods.
“This will significantly influence the cost of goods in terms of customs duties and prices for some of them, including foodstuffs, will go down a little,” Kerobian said.
In order to curb inflation, which stood at 6.5 percent in February, the Central Bank of Armenia decided earlier this month to raise its benchmark interest rate by 1.25 percentage points – to 9.25 percent.
Price increases appeared to accelerate in Armenia in March against the backdrop of the ongoing war in Ukraine and Western sanctions imposed on Russia for invading the country.
Citing regional and global spillovers from the Russia-Ukraine conflict, the International Monetary Fund last week revised downwards its forecast for Armenia’s economic growth from 4.5 percent to 1.5 percent this year.
Armenia’s Central Bank also sharply cut its initial annual GDP growth forecast from 5.3 percent to 1.6 percent.
Still, the Armenian government expects annual inflation in Armenia to be within the target range of 5.5 percent.
“We are very concerned about inflation trends, but one should take into account that this is a global phenomenon,” Kerobian said.
At the same time, he said that at the moment there is a sufficient supply of food in Armenia and that the government is doing everything possible to avoid any disruptions of food supplies caused by the ongoing Russian-Ukrainian war.
Earlier in March there was some apparent panic buying in Armenia of foodstuffs like flour, sugar and cooking oil. But the government urged the population not to stock up on food staples, saying that they will not be in short supply despite the fallout from Western sanctions against Russia.
Kerobian also said that in conditions of many Western goods no longer being supplied to Russia, Armenian manufacturers may see a chance to expand to the Russian market. But he warned: “Exports [to Russia] may increase, but profitability will fall.”