Wednesday, June 5 2024 15:47
Karina Melikyan

YOY inflation in Armenia decreased from 1.3% to 0.3% in May, due to  cheaper food products

YOY inflation in Armenia decreased from 1.3% to 0.3% in May, due to  cheaper food products

ArmInfo. YOY inflation in Armenia decreased from 1.3% to 0.3% in May, due to cheap prices of the most  demanded food products. Thus, in May 2024 compared to May 2023, food products decreased in price by 1.1%, almost repeating last year's decline of 1.2%. Moreover, butter, buckwheat, pasta, flour, cereals,  cheeses, fish, sugar, and meat fell in price most noticeably. 

Services continued to rise in price, only slowing down in pace from  4.7% to 2.3%, but tariffs for car repairs/maintenance and recreation  increased significantly. 

According to the data of the Statistical Committee of RA, in  particular, in May 2024 compared to May 2023, the price of the  following products in the market of food products decreased  significantly: margarine - by 22.9%, buckwheat - by 20.1%, sunflower  oil - by 18.6%, pasta - by 9.1%, flour - by 8.5%, spelt (achar) - by  8.4%, cheeses - by 7.4%, trout - by 6.7%, butter - by 6.3%, sugar -  by 4.8%, bulgur and dzavar (crushed and whole wheat) - by 2.8-5.9%,  poultry, pork and beef - 2.7-4.6%, cocoa and chocolate - by 3- 3.5%. 

The prices of the following products have decreased less noticeably:  fruits by 1.9%, confectionery by 1.4%, bread by 1.1% and cottage  cheese by 0.1%. At the same time, the prices of eggs increased by  6.8%, coffee by 5.6%, vegetables by 4.4%, ice cream by 3.9%, lentils  by 1.6%, tea by 1.2%, beans by 1%, lamb by 1%, sour cream by 0.5%,  milk by 0.3% and matsoni by 0.2%. The average weighted deflation in  the group of vegetables and fruits amounted to 5.91% in May, and this  group of products, having a share of 9.04% in the consumer basket,  had a downward impact on inflation by 0.51 percentage points.

In May, alcoholic beverages increased in price by 7.6% y/y, and  cigarettes - by 5.4% y/y. Moreover, of the alcohol, vodka increased  in price most noticeably - by 10.7%, and beer slightly less - by  4.2%, while wines fell in price by 1.1%. Bottled mineral water  increased in price by 0.6% y/y.

Zero inflation in the non-food market in May 2024 compared to May  2023 (against inflation of 1.1% a year earlier) was due to an almost  equal increase in the price of some goods by 0.4-3.1% and a decrease  in the price of others by 0.6-3.4%. Moreover, the most noticeable  decrease in price was observed in disposable household goods - by  3.4%, medical equipment - by 2.7%, clothing - by 2.3%, building  materials - by 2.1%, and of the goods that increased in price, the  most significant increase was observed in the price of large and  small household electrical appliances and equipment - by 3-3.1%,  furniture - by 2.7%. Gasoline and diesel fuel increased in price by  39.1% and 6.2%, respectively, year-on-year, while in just 5 months of  the current year their prices decreased by 6.2% and 4.3%. In the  service sector, the most significant price increases over the year  (May 2024 compared to May 2023) were for services related to personal  transport - 3.1-fold, comprehensive recreation services - by 23.7%,  sports events and tourism services - by 11.5%, transport services -  by 6.1%, household appliance repair - by 5.5%, and higher education  services - by 4.8%. Hotel business services also increased in price -  by 1.8%, hairdressing and spa salons - by 3.6%, and medical services  increased in price by 2.4%. Dry cleaning and clothing repair  services, as well as clothing rental salons, increased in price by  3.6% over the year. Apartment renovation services increased in price  by 2.4% over the year. Financial services increased in price by 3.2%  year-on-year. For January-May 2024, zero inflation (versus  deflationary 0.9% in the same period of 2023) was formed as a result  of a 2% decrease in the price of non-food products, with a 0.5%  increase in food prices and an increase in tariffs for services by  0.6%, while a year earlier there was an almost identical decrease in  the price of food and non- food products - by 2% and 1.9%,  respectively, with an increase in tariffs for services by 1.3%. 

YOY Deflation of 0.8% (January-May 2024 to January-May 2023), was  recorded (against inflation of 5.2% a year earlier), provoked by a  3.9% drop in food prices, with a 2.8% increase in services and 0.1%  for non- food products, while a year earlier, prices for food and  non-food products slowed in growth from 12.5-5.9% to 4.9-4%, and  tariffs for services accelerated in growth from 3.2% to 6.1%. In  January-May 2024, zero inflation was accompanied by a 4.1%  strengthening of the dram against the US dollar, while a year earlier  in the same period, 0.9% deflation and a 2% revaluation of the dram  against the dollar were recorded. In May 2024 to May 2023, the dram  devalued against the dollar by 0.3% - to 387.8 AMD/$1 with inflation  at 0.3%, while a year earlier in May 2023 to May 2022, there was a  revaluation of the dram against the dollar by 15.3% - to 386.6 AMD/$1  with inflation at 1.3%.

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