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INCREASE IN PRICES IS A BURDEN FOR ALL TYPES OF FAMILIES
hetq
17:37, October 9, 2012
A round-table discussion was initiated and held by Oxfam Armenia
and the Economic Development and Research Center (EDRC) with the
participation of representatives from RoA Government, international
organizations and local NGOs.
Oxfam Armenia and EDRC undertook the project entitled "Monitoring of
food prices in Armenia" within Oxfam's global GROW campaign. Within
the project a series of analytical information periodicals on "Prices
and Vulnerability in Armenia" was elaborated and published. Each report
in the series covers issues deserving public attention including food
safety and mechanisms of generating food prices, tendencies of food
prices and their impact on the behavior and well-being of consumers.
According to the report, the overall level of prices and the tendency
of their increase in Armenia are of general concern. These trends may
lead to numerous consequences both in terms of development of domestic
production and economic growth, as well as managing social risks.
The price increase influences consumer behavior in various income
groups of population in different ways. Increase in prices is a
burden for all types of families. Some families are able to maintain
the previous level and structure of consumption with allocating more
funds for food purchase. Other families verify the content of the
consumer basket by replacing expensive products with cheaper and less
quality ones. The poor groups of population just reduce the level of
consumption since they have no alternatives to replace the products
they used to buy. By reducing the consumer basket which already does
not meet the minimum requirements of food consumption, many people
suffer from malnutrition.
The price increase in Armenia has quite profound causes and cannot be
addressed merely under the light of application of monetary policy
tools. It requires introducing more comprehensive and coordinated
policy programs directed at the development of domestic production on
the one hand and provision of social guarantees on the other. This
condition generates a larger necessity for local policies to be
effective; efforts made in this direction should be extremely
consistent, coordinated and honest.
The report brings evidences that price pressures in Armenia are
largely conditioned not by demand, but supply factors: the inflation
depends on the conditions of supply in individual commodity markets
that often has external impact and regulatory influence in certain
cases. Hence the restraining of inflation should not merely be on
the agenda of the Central Bank of Armenia.
The research suggests avoiding the tremendous impact on price increase
through imports regulations which is both a short-term and a long-term
issue. It can be mainly achieved through enhancing local production.
The latter can also contain price pressures however within a short
period of time it is justified in terms of both social and economic
outcomes.
hetq
17:37, October 9, 2012
A round-table discussion was initiated and held by Oxfam Armenia
and the Economic Development and Research Center (EDRC) with the
participation of representatives from RoA Government, international
organizations and local NGOs.
Oxfam Armenia and EDRC undertook the project entitled "Monitoring of
food prices in Armenia" within Oxfam's global GROW campaign. Within
the project a series of analytical information periodicals on "Prices
and Vulnerability in Armenia" was elaborated and published. Each report
in the series covers issues deserving public attention including food
safety and mechanisms of generating food prices, tendencies of food
prices and their impact on the behavior and well-being of consumers.
According to the report, the overall level of prices and the tendency
of their increase in Armenia are of general concern. These trends may
lead to numerous consequences both in terms of development of domestic
production and economic growth, as well as managing social risks.
The price increase influences consumer behavior in various income
groups of population in different ways. Increase in prices is a
burden for all types of families. Some families are able to maintain
the previous level and structure of consumption with allocating more
funds for food purchase. Other families verify the content of the
consumer basket by replacing expensive products with cheaper and less
quality ones. The poor groups of population just reduce the level of
consumption since they have no alternatives to replace the products
they used to buy. By reducing the consumer basket which already does
not meet the minimum requirements of food consumption, many people
suffer from malnutrition.
The price increase in Armenia has quite profound causes and cannot be
addressed merely under the light of application of monetary policy
tools. It requires introducing more comprehensive and coordinated
policy programs directed at the development of domestic production on
the one hand and provision of social guarantees on the other. This
condition generates a larger necessity for local policies to be
effective; efforts made in this direction should be extremely
consistent, coordinated and honest.
The report brings evidences that price pressures in Armenia are
largely conditioned not by demand, but supply factors: the inflation
depends on the conditions of supply in individual commodity markets
that often has external impact and regulatory influence in certain
cases. Hence the restraining of inflation should not merely be on
the agenda of the Central Bank of Armenia.
The research suggests avoiding the tremendous impact on price increase
through imports regulations which is both a short-term and a long-term
issue. It can be mainly achieved through enhancing local production.
The latter can also contain price pressures however within a short
period of time it is justified in terms of both social and economic
outcomes.