Year by year, the Central Bank of Armenia (CBA) is increasing its administration and capital expenditures. However, it has so far been unable to accomplish the principal task set to it under the Armenian Constitution and law – ensuring price stability.

The Ministry of Finance of Armenia, which was supposed to release its report on the CBA’s expenditure, proposed that the CBA revise its 2011 budget and reduce it within the limits of the possible.

It is noteworthy that the CBA personnel get the highest salaries in the state sector. Even the managers working in the Armenian private sector can be “consumed with envy.” According to the 2011 budget message, the average monthly salary at the CBA is fixed at 438,400 AMD (about U.S. $1,200) – a 4.1% rise as compared with 2010. The reason for such a high salary (with bonuses included) is that the average monthly salaries at commercial banks are fixed at 505,000 AMD (U.S. 1,400). The CBA will also receive a total of 332m AMD (about U.S. $910,000) for the personnel’s health care and other expenditures. The CBA has 26 company cars, with the annual maintenance costs for each averaging 3m AMD (about U.S. $8,000) against 1.2m (about U.S. $3,300) at other government agencies.

The CBA failed to resist the temptation to purchase new cars. About U.S. $50,000 are budgeted for the purchase of a new bus despite the fact that a considerable sum was provided for this purpose last year. Huge sums are spent on the renovation, construction and furnishing of CBA offices though it is notable for its European design. About 11bn AMD (about U.S. $30m) are to be allocated for the construction of the Dilijan regional financial & banking complex – a thing enough to make a cat laugh. The funds could have been spent in a much more effective way. For example, the tourist industry could be developed in the same Dilijan.

The CBA receives over 1bn AMD (about 2.7m) for purchasing computers yearly. The funds would be sufficient for re-equipping all the government agencies. This list of excessive expenditures can be continued without end, whereas Armenian citizens have to calculate their losses from the rising prices.