2024-03-01 15:12:24
According to the report of the Food and Agriculture Organization of the United Nations (FAO), the benchmark index of international food prices rose for the first time during the year in April, along with the rise of global prices of sugar, meat and rice.
Head of Innovation and Institutional Research Laboratory of the State University of Economics of Armenia, Candidate of Economics, Associate Professor Atom Margaryan stated in a conversation with Aysor.am that such fluctuations occur in this season, which will negatively affect the standard of living of the population. “Especially those products that are imported for Armenia and to which our consumers are sensitive today, their price increase will have a negative impact on their condition. Especially since, according to official data, the price of the food basket has increased by more than 47 percent. And the figures presented regarding inflation – 6.4 percent – do not refer to food. It is a general statistical manipulative trick to hide the catastrophic decline in the living standards of especially socially vulnerable groups. If we look at the official figures, approximately 40 percent of our population is poor, and the increase in the price of such products will be very painful for them.”
According to him, now Armenia has become an importing and re-exporting country due to the Russia-Ukraine war and sanctions against Russia. He claims that, in many ways, the macroeconomic figures that are announced are deceptive: “These are distorted statistics, distorted economic transactions. Yes, the general situation is stable, but the living standard of socially vulnerable groups of the population is in a shameful state, because there was no tangible, significant increase in their incomes, especially among pensioners, beneficiaries, and those with disabilities, but the food basket has become more expensive by about 40-50 percent and that the impact will be very painful.”
To the question why when the dollar exchange rate appreciates, the prices in RA rise sharply, and they say that this is due to the dram-dollar exchange rate, but now, when the dollar exchange rate has decreased significantly, there is no decrease in prices, the specialist answered. “It is a consequence of the weakness of control. Institutions that are required to capture exchange rate surpluses do not. They don’t for various reasons, I attribute it to corruption. People are simply fed up with impunity and don’t follow seriously, or they follow with a “write-and-share” mentality. They see and record very well, but they are realized as corruption transactions. This is the problem.”
On the other hand, according to Margaryan, inflation helps the state. Because high prices bring high taxes. “And every day the government reports, declaring that our tax revenues have increased by trillions, it should be noted that a part of their increase is due to inflation. The higher the price, the higher the volumes, both VAT and others. Nothing to be proud of there. Due to this, the importer-intermediary sellers get rich, and the socially vulnerable sections of the population suffer a significant decline in living standards. And this is not a new thing, it has been like this for decades and has been going on in shamefully uncontrolled ways and volumes for the last 5 years. We see that our economy has a deformed, uncompetitive structure, it is free from the creation of added value from high-tech productions, which could be brands in the world market, we do not see such big brands emerging, Armenia has become a seriously positioned country. On the contrary, the situation has worsened, if we look at the changes in the structure of our economy.”
Margaryan also added that re-exports have increased manifold.
“The vast majority of incomes of people from vulnerable groups, 65-75 percent, are spent on food and utility payments. And in these last 5 years we have not seen any major changes in that regard. These price changes will further worsen the social situation of the majority of the society, which is already in an extremely bad situation,” concluded Atom Margaryan.