Inflation in Armenia to persist because of absence of effective market regulation: economist

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Economy

14.12.2011, 17:51

Inflationary pressures at Armenia’s domestic market will persist as long until effective means of market regulation are found and applied, a former finance minister, now deputy rector of the Russian-Armenian (Slavonic) University, Edward Sandoyan, said.

YEREVAN, December 14. /ARKA/. Inflationary pressures at Armenia’s domestic market will persist as long until effective means of market regulation are found and applied, a former finance minister, now deputy rector of the Russian-Armenian (Slavonic) University, Edward Sandoyan, said in an interview with "PostScript" program of A1 + Webcast.

According to him, the national currency is under strong pressure of private remittances and investments that make up a significant portion of incoming foreign currency. Sandoyan said Armenian authorities have failed over 20 years of independence to shape an effective capital market and apart from the banking system there are no other financial institutions.

"In these circumstances, with no other financial institutions and with high levels of poverty, which, according to official statistics, is 35.7%, each dollar that enters Armenian economy, sparks new inflationary pressure," he explained.

Among the problems Sandoyan mentioned also the absence of effective mechanisms to regulate the exchange rate.

According to the National Statistical Service of Armenia, in 2011 November inflation rose by 4.8% year-on-year, driven primarily by a 6.4% rise of prices of foods, including alcoholic beverages and by 3.8% rise of industrial goods prices. -0-

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