ArmInfo.In the consumer market of Armenia in January-December 2021, inflation increased to 7.7% from 3.7% in the same period of 2020 (against inflationary 0.7% in the pre-COVID period of 2019).
This was provoked by the rise in prices for food (including alcohol and cigarettes) and non-food products by 12.5% and 8%, respectively, with an increase in tariffs for services by 1.9%. As a comparison, we note that a year earlier, in January-December 2020, food and non-food products also distinguished themselves by a rise in prices, but less significant (by 5.5% and 3.4%), with an increase in tariffs for services by 1.6%. And two years earlier, in the pre-COVID 2019 period, there was a meager rise in prices for both food products by 0.2% and non-food products by 1.4%, with a slight increase in tariffs for services by 1.1%. This is evidenced by the data of the Statistical Committee of the Republic of Armenia, according to which the average monthly rise in prices in the consumer market amounted to 0.6% in January-December 2021, against 0.3% growth a year earlier and 0.1% growth in the pre-COVID 2019 period.
On a y-o-y terms, (compared to January-December 2020), the consumer market recorded inflation of 7.2% (against inflationary 1.2% a year ago and 1.4% two years ago), which was facilitated by a tangible increase in prices for food products by 11% and a slightly less significant rise in prices for non-food products by 8.7%, with an increase in tariffs for services by 1.9%. These data differ significantly from the inflationary picture of a year ago (January-December 2020 to January-December 2019), when almost the same slight increase in prices of 1.2-1% was recorded in the markets of food and non-food products, with an increase in tariffs for services by 1.4%.
Meanwhile, the monthly inflation rate remains at a low level, in particular, for November 2021, it was 1.6% (against November 1.7%, inflationary 3.4% in December 2020, and inflationary 1.3% in December 2019) due to the rise in prices for food products by 3.1% and non-food products by 0.5%, and an increase in tariffs for services by 0.4%, against 6.4%, 2.3% and 0.3% inflation in December 2020 respectively. consumer prices increased by 1.5% in December 2021 in Yerevan, against growth by 3.3% a year earlier.
Prices have risen significantly in the food market, on a y-o-y terms, (December 2021 to December 2020) vegetables - by 40%, fish and seafood - by 31.4%, granulated sugar - by 19.8%, oils and fats - by 14.7% ( margarine - by 21%, vegetable oil - by 11.8%), dairy products, cheese and eggs - by 11.2% (cottage cheese - by 6.9%, cheese - by 13.4%, eggs - by 12.7%), bakery products and cereals - by 10.2% (bread - by 9.1%, pasta - by 9.5%, flour - by 9.7%, rice - by 13.4%, other cereals - by 23.7%), meat products - by 7.5% (poultry meat - by 5.1%).
In the non-food market, gasoline and diesel fuel significantly increased in price - by 43.3% and 50.4% per annum, respectively. And clothing and footwear in the reporting year rose by 12.3%.
The most tangible y-o-y increase in tariffs for services was recorded in the field of culture and recreation - by 11.9%, in the field of transport - by 5.7%, in the restaurant and hotel industry - by 5.5%, and in the health sector - by 3.2%.
In December 2021, a 1.6% rise in consumer prices was accompanied by a 1.6% devaluation of the dram against the dollar, and in January-December against the background of an inflation of 7.7%, there was a 6.5% revaluation of the dram against the dollar. As a comparison, we note that a year earlier, in December 2020, inflation in the consumer market of 3.4% was accompanied by a 3.9% devaluation of the dram against the dollar, and in January-December 2020, with an inflation of 3.7%, the devaluation of the dram against the dollar was 8 .5%. The calculated AMD / USD exchange rate in November 2021 averaged 485.1 AMD / $ 1, being 6.5% lower than a year ago (518.9 AMD / $ 1), but still exceeding the level of December 2019 (478.2 AMD / $ 1). In its revised October forecast, the World Bank notes that the average inflation rate in Armenia in 2021 will exceed the target range (4%, +/- 1.5) and will reach 6.1% (from 1.2% in 2020). But in the medium term, according to WB estimates, inflation in Armenia will approach the target level, in particular, in 2022 it will decrease to 4.2% with a further decrease in 2023 to the target of 4%, thanks to the focus of the monetary policy of the Central Bank of Armenia to anchor inflationary expectations. The World Bank warns that increased inflation in 2021 will negatively affect equitable equity and household welfare.
And according to the forecast of the Central Bank of the Republic of Armenia, updated in December, inflation in 2021 was expected at the level of 8.4%, with a subsequent decrease to 5.5% in 2022 and the continuation of this trend in 2023 to 4.7%, with the approach in 2024 to the target threshold of 4 %. This is with regards to official inflation (calculated by the Statistical Committee), but a decrease is forecasted for core inflation (calculated by the Central Bank of Armenia): from 7.2% in 2021 to 6.1% in 2022, and then to 5.3% in 2023 and subsequent formation in 2024 near the target - at the level of 4.3%. As a comparison, we note that official and core inflation in 2020 was much lower and formed at almost a similar level - 3.7% and 3.6%, respectively, against the same 0.7% in the pre-COVID 2019. In the same forecast report, the Central Bank cites the FAO index, which will increase annually over the years under review and from 125.7% in 2021 will reach 141.4% in 2024.