Conversations about inflation flare up after each publication of the National Statistic Service.
Let us remind you that according to the latest publicized details of the National statistic service the consumer price index, that is to say inflation was 11.5 % within 12 months. Whereas the prices of food products had a high jump; they had a 17.1% growth within 12 months. This is a terrible indicator especially in the case of vulnerable sector of population whose great part of consumption consists of food products and whose profits almost didn’t grow during the last year. And although we don’t still have the latest official indicators of poverty level we can persist that a dozen thousand people have appeared below the poverty line during the last months. Yesterday expert Harutyun Mesropyan spoke on this issue mentioning that the insecure sector of population, as a rule, waste their money in two directions: just on food products which prices rise more rapidly and utilities. He said: “In 2008 the poverty indicator was 23 %, in 2010-34.1%. This means that approximately 1.1 billion people in Armenia can be classified just to that sector of population. If the National statistic service includes the products used by the insecure sector in the consumer basket then the inflation of 2010 will turn out to be even higher than 25%”. The expert also made an interesting observation: according to him now the methodology of 2005 is used when the 470 products also included compact discs, video recorders and other things of minor importance. Mesrobyan said: “Actually depending on what products are observed and what specific weight they’re given, we can prove that the inflation in Armenia is 0.1% or, for example, 90 %. Depending on methodology inflation may be high or low”. It is true but playing with figures is senseless in this case; people feel inflation immediately on their skin and don’t form an opinion about it following the indices of the National statistic service. And the worst part is the following: people who hardly manage their subsistence come home tired after work, switch on the TV and watch an award-giving ceremony where apartments and cars are so easily presented. Moreover if they could somehow understand when singers got such presents then the fact of presenting an apartment in the center of Yerevan to a popular Russian announcer with impertinent behavior is hardly perceived by a population suffering from inflation. The year-on-year inflation rate was down from 12.4 percent registered by the National Statistical Service (NSS) in February. But it remained well above the maximum target of 5.5 percent that was set by the Armenian government and Central Bank for this year. The latest NSS data show that the consumer price index in March was mainly pushed up by the increased cost of food products sold in the domestic market. It was up by as much as 17 percent from the March 2010 level. Actually besides the inflation, also the over-polarization of income and consumption is no less depressive when one hardly earns bread (having a job), the other squanders. And he does this obviously. And also the official statistics witnesses about this. Our officials, after the publication of a serial report of the National statistic service, usually find several positive indicators and concentrate on them with a sincere aim to soften the sad situation. The external trade became one of these “maneuvering tools” this year. “Export grows very rapidly; the growth of export considerably surpasses the growth of import”, – the speakers say with enthusiasm “forgetting” that the import volume surpasses the export indicators by three times. But this is not the issue that we want to speak about; the statistics of the external trade has also other uncovered “attractions”. It turned out that the import of art works had increased the most during the first three months of this year. It increased not by percentage but by multiple times; compared to the first 3 months of the previous year, this year the volume of import of art works increased by more than 28 times. It seems that parallel to the inflation the love of our oligarchs towards art increases as well.
As we talked about arts, let’s remember about an art creation. In 2006 the Central Bank sponsored a cartoon entitled “The ghost of inflation”. Those who have not seen this cartoon, can watch it in Youtube. Even though five years have passed since this cartoon, we should watch it because it is very interesting. In this cartoon two students of the higher educational institution of economics, a girl and a boy, are trying to understand what inflation is and are going back in time in 80s. They want to buy a cake but the money is not enough. At that time a ghost appears and throws coins in front of them. When they collect the coins and try to buy the cake again, they see that the cake is more expensive now. In a word, the meaning of this cartoon is to show that the large capacity of money in circulation results in inflation. The ghost is the inflation that increases the capacity of money in circulation. The other goal was the demonstration of the role of the central bank as an important institution that regulates the prices. By the way, it specifies that the inflation is considered to be stabile as far as it does not exceed 3%. In the second part of the cartoon the heroes are going to the central bank, where the staff explains to them how they fight against inflation. Later the central bank staff show a glass container with the ghost closed in it. They want to demonstrate that the CB has the tool of putting the inflation ghost in frames. It is an interesting cartoon and we think they should make the third part of it but in the style of the Matrix, and we can give a good title to it as a great tale.