Recently, many people are expressing their views about the inflation in Armenia and, in reality, prices are actually rising in the country. As to why they are rising, that is a different story. According to the national statistics, prices have decreased by 3-5% in July (we must add that there are 400 products included in the consumer basket and that is how the consumer index is calculated). However, we can not deny the truth that is out in the open. We all consume everyday and it is clear to see that prices have gone up since August. For example, prices on toilet paper, dishwashing liquid, soap, hair color, perfumery, diapers for babies, etc. Basically, these are the products which we use everyday. This inflation can be explained by the rise in the dollar exchange rate in August. The dollar rate rose and so did the prices of imported products which are sold at the local market. But one thing remains unclear: why didn’t the prices of some products reduce after the rise of the exchange rate? Perhaps the companies who import the products take into consideration the instability of the exchange rate and they are waiting until it stops going up and down so that they can plan the methods of selling the products.
By taking into consideration the inflation, even vice president of the permanent board of financial, budget and economic issues of the National Assembly Vahram Baghdasaryan has explained it as a lack in formulating a mechanism for control of prices. Who is responsible for the inflation? According to the law, the central bank is the one to blame, but the bank keeps on declaring that it is trying to keep the level of inflation where it stands. However, the people are the ones who go through all that and suffer from the inflation. V. Baghdasaryan believes that one of the reasons for inflation is the rise in the price of benzene internationally and also since it is the product that is used by a majority of economies. President of the Central Bank of Armenia Tigran Sargsyan agrees with this. However, even in this case, there seems to be no logic, meaning that when the price of benzene goes down internationally, the same does not happen in Armenia because the importing companies need to use the benzene which has already been bought at a high price. “There is a certain group of people who benefits from the inflation,” says V. Baghdasaryan. We can predict that those companies are the large importing companies.
Many questions remain unanswered. For example, whereas last year 10,000 drams was paid for collecting the wheat in a one hectare field, this year we can even see a rise in this field of economy-the price has gone up to 15,000 drams. We can not compare this with the rise in the price of oil because oil is something that is provided to the economic field separately. So, which mechanism works in the market? This is a difficult question to answer. Perhaps there is the psychological factor. Each service can think about the following: “If the prices of all products go up, why shouldn’t I raise the price I pay for the work being done?”
Let’s go back to the people who can not afford the products. Even if the prices of some products remain the same in drams, the price of those products in dollars goes up because the dollar rate keeps on going down. A certain part of the population received huge profits from the relatives living and working abroad. For those people, there exists a special type of inflation one way or another.