Annual inflation in Armenia in September amounted to 0.6%

ArmInfo.In the consumer market of Armenia, annual inflation in September amounted to 0.6%, with a  deflation of 1.1% for the first nine months of 2024. Comparatively, a year ago, during the same periods, annual inflation was  recorded at 0.1% and nine-month deflation at 2.3%. This is evidenced by the data  of the Statistical Committee of the Republic of Armenia for January- July 2024.

In September 2024, inflation compared to September 2023 was primarily  due to a 3.6% increase in service tariffs, accompanied by a 0.5%  decrease in food prices and a 1.7%  decrease in non-food products. To  provide context, in the previous year (September 2023 to September  2022), inflation was driven by a 3.2% increase in service prices,  with only food products experiencing a 1.9% decrease in price, while  non-food prices remained stable. From January to September 2024,  deflation was observed as food and non-food product prices decreased  by 3.4% and 2.7%, respectively, while service tariffs increased by  3.1%. 

For comparison, we note that in January-September 2023, higher  deflation was also seen in a decrease in the price of food and  non-food products by 6.4% and 0.9%, while service tariffs showed  growth, albeit at a lower rate of 2.4%. Looking at the annual basis  (January-September 2024 to January-September 2023), the zero consumer  price index compared to the inflation rate of 2.8% a year earlier,  was a result of a decrease in the prices of food and non-food  products by 2.1% and 0.4%, with an increase in service tariffs  by  3%. In the previous year, from January-September 2023 to  January-September 2022, the recorded inflation was influenced to a  lesser extent by the increase in the price of food and non-food  products - by 1.5% and 2.2%, compared to an increase in tariffs for  services by 5%. 

Among food products, the most noticeable annual increases (September  2024 to September 2023) were for coffee - by 9.2%, eggs - by 8%,  sugar and granulated sugar - by 7.4%, chocolate - by 4.3%, tea - by  2.4%, butter - by 1.2%, flour - by 1%, and fruit - by 1%. The prices  for the following food products decreased year-on-year: margarine -  by 16.3%, buckwheat - by 12.2%, wheat groats (dzavar) - by 6.7%,  pasta - by 6.2%, sunflower oil - by 6.1%, spelt (achar) - by 4.7%,  vegetables - by 4.3%, trout - by 3.4%, flour - by 3.3%, milk - by  1.8%, pork and beef - by 4.5% and 0.6%, respectively, bread - by  0.4%. Of the alcoholic beverages, vodka increased in price  year-on-year by 10.3%, beer - by 3.4%, and wine fell in price by 2%.   The annual growth in cigarette prices slowed from 11.4% to 1.3%. 

In the non-food market, from September 2023 to September 2024, prices  for jewelry increased by 12.7%, large and small household electrical  appliances by 3.4-2%, gardening tools by 3.3%, medicines by 2.3%, and  tools and accessories by 0.2%. However, disposable household goods  became cheaper - by 8.4%, clothing and footwear - by 4.1% and 2.3%,  respectively, medical equipment and devices - by 3.3%, building  materials - by 3.1%, and dishes and kitchen utensils - by 0.7%.  Gasoline prices remain stable, while diesel fuel prices fell by 1.5%.  It is worth noting, that a year earlier, gasoline prices increased by  0.4% and diesel fuel prices decreased by 17.4%. 

In January-September 2024, gasoline and diesel fuel prices fell by 5%  and 7.8% respectively. This is a significant decrease compared to   January-September 2023, when gasoline prices rose by 18.1%, and  diesel fuel prices fell by 6.2%. In September alone, gasoline prices  increased by 2.5%, and diesel fuel prices decreased by 0.1%.  As for  the increase in services tariffs, there have been notable  year-on-year price hikes in various sectors. Services related to  personal vehicles - by 3.1 times, comprehensive services in the field  of organizing recreation - by 27.6%, services in the field of  transport - by 17% and related to vehicle insurance - by 13.6%. In  the education sector, prices have gone high by 12.3-7%, and for home  repairs, furniture and household appliances - by 3.5-2.3%.

 The growth of tariffs for financial services has significantly  slowed down from 13.1% to 1.8%, for hotels- from 7% to 1.7%, and for  medical services from 5.9% to 2.5%.  The services of hairdressers and  spa salons have risen much more noticeably - by 5.9%  compared to  1.6% a year ago. In January-September 2024, there was a deflation of  1.1% along with a strengthening of the dram against the US dollar by  4.2%, mirroring the trend observed a year earlier with deflation of  2.3% and a dram revaluation against the dollar by 1.9%. In September  2024, compared to September 2023, there was an inflation rate of  0.6%, the dram weakened against the dollar by 0.1% - to AMD 387.40  /  $ 1 (from AMD 386.90 / $ 1 a year earlier). In the previous year,  there was an inflation rate of 0.1% and the dram had strengthened  against the dollar by 5.4%. 

It should be noted that the Central Bank of Armenia (CBA) forecasts  inflation in 2024 to be within the range of 2-2.1%, compared to the  deflationary rate of 0.6% in 2023. The forecast also predicts   further growth in 2025, ranging from 3.2-4%. Moreover, according to  the CBA forecast, inflation in the  non- exportable goods, which is  characterized by rigid prices, will decrease to 2.5% in 2024 (down  from 4.8% in 2023), before increasing to 2.8-3.3% in 2025. According  to the World Bank forecast, inflation in Armenia is expected to rise  to the target of 4% in the medium term. According to the  International Monetary Fund forecast, inflation in Armenia will be  3.3% by the end of 2024, reaching the target level of 4% in 2025.