By Albert Khachatryan

Not only Armenian citizens, but also Armenia’s guests are surprised at the galloping prices in the country. There is not accounting it for global processes any longer. For example, deflation rather than inflation has recently aroused concern in the “rich” United States.

From the economic point of view, this situation does not promise anything good to local producers. So the U.S. Federal Reserve System is now thinking of measures to boost consumer demand. “Fortunately”, we are not faced with deflation, as price rise is setting records in Armenia.

Besides, much lower rates of growth in retail turnover have been registered this year, which is evidence of with inflation, which, in turn, limits the population’s purchasing capacity.

Ordinary consumers are first of all concerned with food prices. This commodity group has shown the highest price rise. This September, the consumer price index was 108.6% as compared with last September. On the other hand, food products show a consumer price index of 111.6%.

Specifically, the prices for vegetables and potatoes showed a 58% rise, meat price a 16.3% rise and fruit price a 21.2% rise. Unfavorable weather accounts for the rise in prices for vegetables. However, what is the explanation for the steep prices for animal products the Armenian Ministry of Agriculture can provide? In any case, it will not explain it by its own disastrous agricultural policy.

The RA Statistical Service reports a 2.4% decrease in gross animal produce this January-September as compared with the corresponding period last year. A 2.9% decrease in milk output was registered. A 23.5% increase in egg output is perhaps the only “comfort” for consumers.

No official statistical data on October 2010 is available. However, the public has already been excited over the jump in the prices for dairy products! The rise in cheese prices arouses special concern – cheese is one of the “traditional” products for the Armenian population.

High-ranking Armenian officials’ statements on the possibility of export of animal produce are believed to be the cause of the price rise. However, the same persons should focus on protecting the domestic market rather than on exporting surplus.