YEREVAN, July 12. /ARKA/. The inflation rate in Armenia is now comparable with inflation rates around the world, said Vardan Aramyan, a former Finance Minister, who is now an expert on public finance management.
“Inflation has become today a headache for the whole world. Even in the U.S. and Europe, the countries which have strong economies and powerful instruments, this has caused large problems,” Aramyan said in an interview with 168.am publication.
According to him, the 12-month inflation rate in the US in May this year was 9.8%, up from the projected 2%. In the European Union, Great Britain inflation exceeded 9.1%.
On Armenia’s neighbor countries, Aramyan noted that, for example, in Georgia the inflation rate in the first 5 months of the year reached 13%.
“We should take this situation calmly, because it came from outside. Another thing is how the consequences and benefits/damages will be redistributed in the society,” the former minister pointed out.
Speaking of external factors affecting the global economy and inflation in particular, Aramyan named the coronavirus pandemic.
“As a result of the 2020 pandemic, governments of almost every country have made insane expenditures. In some countries, this spending amounted to 10 percent or more of national GDP. In Armenia, this figure did not exceed 2-3 percent,” the former minister recalled.
Globally, according to his data, trillions of dollars have been spent by the governments on supporting businesses and their citizens, i.e. the amount of money in economies has increased. “What has happened is this: demand has gone down, money has gone up,” Aramyan said.
The former minister said another important factor was the conflict in Ukraine, which, among other things, has resulted in a global shortage of grain, a decrease in the volume of food products, a rise in the price of fuel and so on.
According to the National Statistical Committee (NSC) of Armenia, the 12-month inflation in June 2022 was 10.3%.
Armenian government’s growth projection for 2022 is 7%, and the inflation is set at 4% (± 1.5%). Armenia’s Central Bank revised earlier upwards the country’s GDP growth forecast for the current year from 1.6% to 4.9%
According to the World Bank’s latest Global Economic Prospects report, Armenia’s GDP in 2022 is expected to grow by 3.5%, down 1.3 p.p. from the previous forecast, made in January.
World Bank analysts expect Armenia’s GDP to grow by 4.6% in 2023 (0.8 p.p. down from the January forecast) and by 4.9% in 2024.
The International Monetary Fund (IMF) expects Armenia’s GDP growth to reach 5 percent in 2022, while inflation is projected to increase temporarily before moderating by the end of the year.-0-
