Guillermo Tolosa, IMF Resident Representative in Armenia, recently informed the Armenian public of the IMF’s forecasts.

Specifically, the IMF forecasts an inflation rate of 6.2%, which is entirely contrary to the RA Government’s forecasts – a budgeted inflation rate of 2.5%-5.5%.

This January-March, the consumer price index “set a record” by reaching 108.2% over the recent years. The April 1 rise in the gas price is expected to push up inflation and, later, prices. Under circumstances, might the consumer index fall down to the level forecast by the IMF?

Last year, which is a basis for calculations of the consumer price index, was marked by relatively low inflation. Specifically, in February, as well as in the summer, the chain index even fell below 100%. With a low price base considered, the annual inflation will hardly go down to the level forecast by Mr. Tolosa, to say nothing of the budgeted inflation. This requires a sharp reduction in the prices for products and services with a large share in the “statistical basket.” It is only possible on paper.

As regards forecasts, they, as a rule, are conveniently forgotten. Let us recall a couple of forecasts made last year, after the Armenian dram was “allowed to flow.” The then Chairman of the Central Bank of Armenia (CBA) stated that the GDP was to be “several percent” in Armenia in 2009. The day before, Nienke Oomes, the then IMF Resident Representative in Armenia, issued a less optimistic forecast, a 1.5% decrease. Both the forecasts proved blatantly false. Armenia registered the first largest decline in GDP (14.4%) in the Commonwealth of Independent States (CIS).

T.P.