Armenia's economy doomed to failure

/By AzerNews/

By Mushvig Mehdiyev

A sharp inflation is expected to hit the lagging economy of Armenia in the coming months, seriously paralyzed under the recent economic developments in Russia.

Fluctuation of the dollar and ruble rates, unfair market competition and tangible influence of the anti-Russia sanctions are the key factors feeding the forecasted inflation.

Artak Manukayn, a local economist, predicted a surging inflation in Armenia in the first quarter of this year.

The official statistical data revealed the inflation rate in January by 1.25 percent more than the previous months. Moreover, a 4.3 percent rise is observed particularly in the food prices this year compared to the same period of the last year.

"Inflation proved that the raid by Prime Minister Hovik Abrahamyan to Yerevan's supermarkets had short-term effects. Now, in some cases, the prices are the same, but the weights of products are lower," Manukyan said.

Fluctuation of the dollar and ruble rates in exchange markets make a good room for inflation, Manukyan noted. "Russia is the major trade partner of Armenia and subsequently the ruble's devaluation is taking its tolls on our economy."

Manukyan believes that the life in Armenia was worse in 2014 than it was in 2013.

"It seems that we will face a worse life in 2015 than we experienced in 2014," he added.

Growth in salaries and economic progress are viewed as factors compensating the inflation, but, we are not observing any significant advancement in Armenia in terms of reducing the poverty, said the economist.

Vilen Khachatryan, another local economist, said that prices of the exported goods will rise in Armenia amid the skyrocketing inflation expectations in Russia. Meanwhile, the Russian central bank announced that the rate of inflation could surpass 15 percent in the country this year.

Khachatryan believes that if the economic growth falls by 6 percent in Russia this year, the same comedown will absolutely be observed in Armenia, as well.

Forecasts by international organizations on Armenia's economic progress promises no good future due to the ongoing stagnation in many fields including economy, trade, business, agriculture and etc.

Fitch and Moody's have downgraded their outlooks for Armenia's economic growth, while the European Bank for Development and Reconstruction has even annulled its forecast on economy in the post-Soviet country this year.