Armenia stands in opposition to worldwide trend

/By AzerNews/

By Mushvig Mehdiyev

Prices in Armenia's domestic market surprised experts and citizens as a sharp increase was recorded at a time when the United Nations announced that food prices have decreased worldwide.

According to the data, foodstuff prices rose by 4.7 percent in Armenia this April while the overall growth standing at 4.8 percent.

Inflation has remained within reasonable limits in the world's developed countries. Some countries even witnessed some degree of deflation, according to the UN data. But the things have gone on a different way in Armenia.

Experts say the observed increase in food products' prices has comes as a surprise amid the government's "positive" records in agriculture and processing industries. The January-March statistics issued by the government showed a 28.9 percent growth in crop and 3.5 percent in livestock production.

But current prices in Armenia's markets disprove such reports.

For instance, sugar prices rose by 4.5 percent on the background of the sweet products lowest ever price recorded since 2009. Additionally - a 7.3 percent increase hit bakery products in comparison to last year, denoting a dichotomy in between state data and reality.

More troubling yet, even though we are in the middle of spring, a season marked by the arrival of many fresh products on the market, fruit and vegetable prices in Armenia have spiked by 23.7 percent since last year during the same period. This is likely to affect Armenia's working class the hardest as people continue to struggle to make ends meet.

Fluctuations in the national currency, the dram, along with the devaluation of the Russian ruble, and the rise of the dollar and euro in the exchange markets have had a deep impact on prices as well.

The latest dram-dollar trade in Yerevan's exchange points is 480 drams per one dollar, while one euro is sold for nearly 540 drams.

Earlier in April, a survey conducted by local media outlet FactInfo revealed that Armenian nation’s buying power has hit an all-time low over the past years, putting the private sector under aggravated pressure. The owners of many shops have linked the "fatal stagnation" in markets to the shortfall of buyers amid such tough economic times.

Some specialists believe that Yerevan's dedication to the Eurasian Union Integration has also taken its toll on Armenia's lame economy. Thomas de Waal, a senior associate at the Carnegie Endowment, put a bad mark to Armenia's "promising" integration into the EEU when he said the recent economic stagnation in the country was triggered after the government yoked the country even more strongly to Russia by joining the alliance.

Armenia also got bad marks from Fitch and Moody's, as both downgraded their outlooks for the former Soviet nation's economic growth. The European Bank for Development and Reconstruction has even zeroed out its forecast on Armenia economy for 2015.