Friday, August 16 2013 18:38
Expert: Real inflation in Armenia is over 20%, so, the rise in the refinancing rate will give no results
ArmInfo. The 0.5% rise in the refinancing rate to 8.5% will not be able to curb inflation as we have no real interest rate concept in Armenia, economist Harutyun Mesrobyan told journalists on Friday.
"Our official inflation statistics are distorted. So, the rise in the refinancing rate is a sign that Armenia is having serious inflation- related problems caused by the rise in energy prices. A really socially oriented country should calculate inflation differently for different social groups. For the poor it should cover 60 essential items and bills, for the middle class 190 items and bills. If our authorities do this, our real inflation for the poor will be more than 20% rather than 8.1%. Such a high inflation can hardly be curbed by changes in the refinancing rate," Mesrobyan said.
He said that the Armenian authorities use the following mechanisms for curbing inflation: they reduce AMD supply by either sterilizing it or effecting currency interventions. "But both methods are deficient as they have nothing to do with real economy. It is economically incorrect to constitutionally proclaim a Central Bank as a price regulator," Mesrobyan said.
President of the Republican Union of Employers of Armenia Gagik Makaryan said that by raising the refinancing rate by 0.5% the Central Bank just wanted to show that it was vigilant and adherent to its constitutional role of price stability megaregulator. "We have never had an efficient strictly classified mechanism for controlling inflation," Makaryan said.
He said that the rise in energy prices will push other prices up and will lead to low solvency and declining consumption. "Among the key victims will be SMEs," Makaryan said.
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