Rise in food, services prices causes 3.6% y/y inflation in Armenia 

ArmInfo.  In August 2025, compared to August 2024, inflation of 3.6% was recorded in the consumer market of Armenia (against the inflation of 1.3% a year  ago), provoked by the rise in prices of food products and services.  In the first 8 months of 2025, inflation was formed at the level of  0.8% (against last year's deflation of 1.2% in the same period),  which was also the result of the rise in prices of services with a  slight decrease in prices of food and non-food products. According to  the Statistical Committee of the Republic of Armenia, in August of  this year alone, inflation of 0.2% was recorded (against the  inflation of 0.1% a year earlier in the same month), provoked by the  unchanged prices of food products and an increase in prices of  non-food products and services by 0.4% and 0.3%, respectively. In  Yerevan, consumer prices increased by 0.2% in August, against a 0.1%  decline in August 2024.

In the first 8 months of this year, slight inflation was provoked by  a 2.9% increase in the price of services with a slight decrease in  prices for food and non-food products by 0.2% and 0.4%, respectively,  which was also noted a year earlier for 8 months - an increase in the  price of services by 2.3% and a decrease in the price of food and  non-food products by 2.9% and 3.2%. In January-August 2025, compared  to the same period in 2024, inflation was recorded at 3.2%, against a  deflationary 0.1% a year earlier. Moreover, food prices increased by  5.1%, services increased in price by 3%, and non-food products fell  in price by 0.4%, while a year earlier both food and non-food  products fell in price by 2.3% and 0.2%, and services rose in price  by 2.9%.

In August 2025 to August 2024, inflation of 3.6% came from an  increase in prices for food products by 5% and services by 3.2%, with  a slight increase in prices for non-food products by 1.1%, while a  year earlier in August 2024 to August 2023, lower inflation of 1.3%  was recorded, provoked by a higher increase in prices for services by  3.3% than for food products by 1.3%, with a decrease in prices for  non-food products by 1.6%.

Among food products, the most significant price increases  year-on-year were for trout - by 22.6%, cocoa - by 22.5%, fish and  seafood - by 20.9%, sunflower oil - by 16.8%, coffee - by 13.5%,  butter - by 12.8%, fruit - by 11.6%, pork - by 10.3%, ice cream - by  9.7%, chocolate - by 9.4%, peas - by 7.8%, flour - by 7.2%, bread -  by 5.1%, lamb - by 3.8%, beef - by 2.5%. At the same time, there was  an annual decrease in the price of sugar and granulated sugar - by  7.5%, eggs - by 5.8%, vegetables - by 3.6%, bulgur - by 3%, buckwheat  - by 2.7%. Moreover, vegetables have become cheaper not only  year-on-year, but also by 5.8% in August, while the price of fruit,  having increased significantly year-on-year, has not changed in  August.

Cigarettes have increased in price by 8.2% year-on-year, against a  growth of 1.4% a year earlier. Of alcoholic beverages, vodka has  increased in price most noticeably year-on-year - by 4.8%, while wine  and beer have increased in price more modestly - by 2.9% and 2.4%,  respectively, whereas a year ago wine fell in price by 1.7%, while  vodka and beer have increased in price more significantly - by 10.9%  and 4.4%, respectively. Bottled mineral water has increased in price  year-on-year by 2.8% (against a 1.9% growth a year ago). In the  non-food market, the annual growth of prices for jewelry accelerated  - from 11.2% to 23.7%, and large and small household electrical  appliances and equipment continued to grow in price - by 4.1-5.9%  (against 2.6-1% growth a year ago). Medicines and medical equipment  began to grow in price - by 4.4-5.4% per annum, whereas a year ago  medicines increased in price by only 1.7%, and medical equipment fell  in price by 4%. Furniture, after last year's increase in price by  1.1%, in August of this year increased in price by only 0.2%.  Disposable household goods also began to rise in price - by 4% per  annum (against a 9.6% decrease a year ago), footwear - by 1.3% per  annum (against a 2.4% decrease a year ago), tableware and kitchen  utensils - by 0.2% per annum (against a 1.1% decrease a year ago). At  the same time, there was an annual decline in prices for gardening  equipment - by 8.8% (against a constant a year ago) and a slower  decline in prices for clothing - from 4.7% to 0.6%. Gasoline and  diesel fuel fell in price year-on- year (August 2025 compared to  August 2024) by 2.9% and 2.4%, respectively, while a year ago there  was an increase in the cost of both gasoline and diesel fuel - by  3.2% and 5.4%. Over the first 8 months of 2025, gasoline and diesel  fuel prices fell by 4.3% and 0.7%, respectively, which was also  observed last year during the same period - gasoline prices fell by  7.3% and diesel fuel prices by 7.8%. But in August of this year  alone, gasoline and diesel fuel rose in price by 0.1% and 0.4%,  respectively, while a year ago, in August 2024, gasoline rose in  price more noticeably - by 1.6%, and diesel fuel fell in price by  1.2%.

As for tariffs for services, a noticeable growth was recorded in the  annual context in the areas of transport - by 27.6% (including 6.6%  for insurance), comprehensive services for organizing recreation - by  14.3%, preschool and primary education - by 12.3%, higher education -  by 7%. Tariffs for hairdressing and SPA salons accelerated in growth  - from 6% to 11.5%, medical - from 2.5% to 3.2%, and it is noteworthy  that dental clinic services increased in price by 5.3%, and doctor's  consultations - by 7.1%. In the hotel business, services continue to  rise in price, but less noticeably - by 2.7% than a year ago (5.3%).  August inflation of 0.2% was accompanied by a strengthening of the  dram against the dollar by 0.2%, and over the first 8 months of 2025,  with inflation of 0.8%, the dram strengthened against the dollar by  3.4%. As a comparison, we note that a year earlier, August inflation  of 0.1% was accompanied by an unchanged dram exchange rate against  the dollar, and over the first 8 months of 2024, deflation of 1.2%  was accompanied by a strengthening of the dram against the dollar by  4.1%. In August 2025, compared to August 2024, with inflation at  3.6%, the dram strengthened against the dollar by 1.3% - from 388.1  to 383.2 drams/$1, while in August 2024, annual inflation was  recorded at 1.3% and the dram devalued against the dollar by 0.5%  (from 386.2 drams/$1 in August 2023).

It should be noted that the Central Bank of Armenia forecasts  inflation in 2025 within 3.4-3.2%, against inflation of 1.5% in 2024.  With further approach in 2026 to the updated target level (3%, +/- 1  p.p.) - up to 3.2-2.9%. Moreover, inflation in the segment of  non-exportable goods with rigid prices will increase in 2025 to  2.7-2.6% (from 2.5% in 2024) and will continue to grow in 2026 to  3.5-2.8%. According to the forecast of the International Monetary  Fund, inflation in Armenia by the end of 2025 will remain close to  the target level (3%, +/- 1 p.p. - Ed.).

Let us recall that starting from 2025, the target inflation level is  set at 3% with a range of permissible deviations of +/- 1 p.p.  (versus the previous 4%, +/- 1.5 p.p.). The RA Law "On the State  Budget of Armenia for 2025" stipulates that the Central Bank, when  making decisions on monetary policy, will henceforth be guided by the  new inflation target (3%, +/- 1 p.p.).