Monday, January 22 2018 15:36
Alina Hovhannisyan

Expert: Inflation is a litmus test, indicating the need for fundamental changes in economic policy

Expert: Inflation is a litmus test, indicating the need for fundamental changes in economic policy

ArmInfo. Today's inflation in Armenia is nothing more than a litmus test, indicating that the economic policy being conducted in Armenia is ineffective, and needs radical changes. The economist, chairman of the Union of Industrialists and Manufacturers of the RA Vazgen Safaryan expressed such an opinion during the press conference on January 22.

According to the expert, the liberal-market model of economic development has not justified itself, so Safaryan considers it expedient to make the transition to the planned-market format of economic development, which is successfully implemented in China. "China now ranks 2nd in the world in terms of GDP - about $ 11 trillion, while GDP per capita in five years increased 2.6 times. We should follow such successful examples," he stated.

Returning to the issue of tangible price increases in Armenia, Safaryan noted the expediency of stimulating domestic production. "First of all, it is necessary to reduce dependence on imported products, in particular, oil and meat, which occupies a significant share in imports," he said, responding to a question from ArmInfo. Today, he said, there are about 160,000 farms in Armenia, with an average of 3 units of cattle on average. "Producers, guided by high demand, in particular, coming from Iran increase the export of meat.  And considering the inflation trends, in the general consumer basket we need to provide up to 50% of dairy products of domestic production," he said. According to Safaryan, in this case it will be expedient to suspend exports. In particular, the expert noted the need to create agricultural cooperatives in the context of public-private partnership, which in future the state is obliged to support the development of production, and in the future also in marketing.

According to the National Statistical Service of Armenia, for the consumer market of Armenia in 2017 was inflationary - 2.6%, after two years of deflation - 1.1% in 2016 and 0.1% in 2015. This was mostly caused by an increase in prices of food products (including alcohol and cigarettes) by 5.3% and non-food products by 1.7%, while tariffs for services decreased by 0.5%. The average monthly increase in consumer prices in January-December 2017 was 0.2%, against a decline of 0.1% a year earlier. In January 2018, due to the increase in excise duties as part of the adoption of the new Tax Code, prices for liquefied gas, motor fuel and some essential products have risen significantly in the country.

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