ArmInfo. YOY inflation in June 2022 increased to 10.3% in the consumer market of Armenia. Food prices went up by 17.1%.
With the current level of unemployment (the average y-o-y unemployment rate in Armenia in 2021 was 15.3%), and poverty at almost 30%, the Armenian authorities can and must alleviate inflationary pressure on the population today by reviewing the expenditure side of the state budget, rather than feeding the population with promises raise the minimum wage and pensions in six months. Atom Margaryan, the head of Innovation and Institutional Research Scientific-Educational Laboratory of the , Armenian State University of Economics (ASUE), PhD in Economics made such a proposal in an interview with an ArmInfo correspondent.
, the expert says.
At the same time, the government, which trumpets the fact that the target level of government exchequer tax collection has been exceeded, is "modestly" silent about the extremely high inflationary component of this "phenomenon". "A rough, forced redistribution of the incomes of the population is being carried out, encouraged by the authorities, and, in the form of an inflationary tax, the incomes of the poor, those who live on the salary of a state employee, pensions and benefits are distributed in favor of large businesses and the state," Margaryan notes.
, the economist says.
At the same time, according to him, judging by how the Russian-Ukrainian crisis and events in the world food market are developing, inflation indicators by the end of the year cannot fit into the range of 4% expected by the Central Bank with a deviation of plus or minus 1.5%. Even the tight monetary policy of the Financial Regulator and the strong dram policy will not help. , he notes.
In the meantime, according to Margaryan, in addition to manipulations with the dollar, there has always been an alternative to increasing the debt burden. For example, through the competent management of natural resources, in particular - subsoil resources. Despite the fact that the tax revenues of subsoil users increased in the context of rising world prices for copper and gold, the real incomes of the metallurgical and mining industries, for the most part, hid in offshore zones, the incomes of the sector are generated by the transfer pricing mechanism and remain in the "shadow". "The time has come to conduct a mass audit and identify those who hide real incomes and are malicious tax evaders. It is time to apply not only fines and penalties to these companies, but also go for their nationalization," the economist says.
The expert also calls for a closer look at natural monopolists. , he notes.
According to the expert, despite the fact that there are all prerequisites in the formal plan for ensuring both a 7% GDP growth both by the end of the current year and over the next three years, as forecasted in the draft Medium-Term Expenditure Program (MTEP), the scale of this growth is not only incomparable with the threats that Armenia and Artsakh faced after the 44-day war, but will in no way improve the live conditions of our citizens. On the contrary, according to Margaryan, today we can already say that the real incomes of 80% of the population have decreased and by the end of 2022 the citizens of Armenia will live worse than at the beginning of the year. , Atom Margaryan concludes.
Earlier, on June 30, Minister of Finance of Armenia Tigran Khachatryan stated at a government meeting that by the end of 2022, Armenia will ensure the GDP growth rate of 7% set in the state budget. Presenting the Medium-Term Expenditure Program for 2023-2025, the head of the Ministry of Finance also said that Armenia aims to ensure a 7% GDP growth over the next three years, and Prime Minister Nikol Payahinyan, in turn, assured that from 1 January 2023, the minimum wage will be increased - up to 75 thousand drams from 68 thousand, as well as pensions and child care allowance will also be increased
