Low Income Keeps Inflation Low

The economic activity index of Armenia was 7.8% in the first half of this year compared with the same period of the past year. The National Statistics Service informs that growth was reported in almost all the spheres. Manufactured goods grew by 13%, GAP grew by 8.1%, services grew by 12%, electric power production grew by 9.1%.

According to the NSS, the average nominal salary grew by 6.2%. Trade increased by 8.2%, including export by 13.5 and import by 6.7. Building continues to decline.

Commenting on these indices, Member of Parliament Artsvik Minasyan, ARF, told Lragir.am that the economic activity index does not indicate growth and progress. He says the economic potential of Armenia is not used at full. “On the one hand, we have huge issues relating to unemployment, salaries, income. On the other hand, our country is not competitive in the world and in the region. It means that this pace cannot be satisfactory,” he said.

According to Minasyan, as building continues to decline, it leads to growth of unemployment, housing issue, decline of industrial infrastructures. For their part, these factors affect the dynamics of economic development and the quality of life.

“Where economic activity is explained by the growth of the GAP, we should keep in mind that this is a season when production of agricultural products, as well as the high prices, helps establish this index. If we calculate the real index, we will not see a significant growth. The same refers to manufactured goods. We have 13%, a double-digit growth, but statistics of industries shows that Armenia continues to boost production of metals which is not the result of the economic structure and correct economic policy,” he said.

He says production of non-metal mines is at an absolutely low level and is an important sphere not only in terms of environment but also the economy.

The Consumer Price Index totaled 102.2% in the first half of this year compared with the first half of last year. Inflation is only 2.2. Artsvik Minasyan says this is related to income of households.

“When citizens do not have enough income to buy one product or another, its price cannot soar, of course. In other words, inflation is low because people are half-hungry. This is not a good result,” he notes.

The standard of living falls, people are desolated, they increasingly think about migrating to earn a decent living in other countries.