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WRONG TURN: VALUE OF NATIONAL CURRENCY GOES DOWN, PRICE OF GOODS GOES UP
ECONOMY | 02.12.14 | 15:41
http://armenianow.com/economy/58986/armenian_economy_crisis_in_russia_karen_chilingary an
GOHAR ABRAHAMYAN
ArmeniaNow reporter
On Tuesday the average rate of the Armenian currency reached 435 drams
per one U.S. dollar, marking the highest the dram has been since 2005,
and continuing a climb that has been going on for several days.
According to Consumers Consulting Center NGO President Karen
Chilingaryan, the devaluation of the dram is related to the economic
situation in Russia, where foreign sanctions (over aggression against
Ukraine) have caused the ruble to devalue.
The devaluation of the dram plus an increase in the cost of goods,
leads to inflation, economists say.
"The Russian ruble had about a 50 percent decline in Russia, and in
Armenia a decline of the dram. These are related (because) Armenian
labor migrants mostly choose Russia and because of the crisis there,
their transfers also decreased," Chilingaryan said, adding that the
$1-2 billion in annual transfers will likely be cut in half this year -
a serious blow to the Armenian economy.
Rising costs for staples against the decline of the national currency
spells difficulty for many Armenian households.
Chilingaryan uses the cost of potatoes as an example . . .
"Last year 660,000 tons of potatoes were produced in Armenia, while
this year - 670-680,000 tons. But a year a year ago at the same
period potatoes cost 160-200 drams (about 36-45 cents per kilo),
while now it costs 250-270 drams (about 57-67 cents)," Chilingaryan
said, relating these price increases to the Western sanctions against
Russia, because of which export from Armenia to Russia increased.
Chilingaryan expects further negative impact on the economy as Armenia
adjusts to the demands of its membership in the Eurasian Economic Union
(EEU).
"Since we are entering the EEU, the rules of the game will also
change. The goods that we import, and we are an importing country -
almost 70 percent of goods -- customs tax will reach 25-30 percent,"
Chilingaryan said.
According to Chilingaryan price increases create a chain effect.
Seeing that one good is more expensive, all other goods also get
more expensive.
"I am sure that at the threshold of the New Year's Eve, as always
another price increase is not excluded. There are goods that might
be cheaper in Armenia, but they are expensive, and the reason is,
alas, the importers work in the field of monopolies.
There is a concern that meat will also get more expensive,"
Chilingaryan said.
From: A. Papazian
ECONOMY | 02.12.14 | 15:41
http://armenianow.com/economy/58986/armenian_economy_crisis_in_russia_karen_chilingary an
GOHAR ABRAHAMYAN
ArmeniaNow reporter
On Tuesday the average rate of the Armenian currency reached 435 drams
per one U.S. dollar, marking the highest the dram has been since 2005,
and continuing a climb that has been going on for several days.
According to Consumers Consulting Center NGO President Karen
Chilingaryan, the devaluation of the dram is related to the economic
situation in Russia, where foreign sanctions (over aggression against
Ukraine) have caused the ruble to devalue.
The devaluation of the dram plus an increase in the cost of goods,
leads to inflation, economists say.
"The Russian ruble had about a 50 percent decline in Russia, and in
Armenia a decline of the dram. These are related (because) Armenian
labor migrants mostly choose Russia and because of the crisis there,
their transfers also decreased," Chilingaryan said, adding that the
$1-2 billion in annual transfers will likely be cut in half this year -
a serious blow to the Armenian economy.
Rising costs for staples against the decline of the national currency
spells difficulty for many Armenian households.
Chilingaryan uses the cost of potatoes as an example . . .
"Last year 660,000 tons of potatoes were produced in Armenia, while
this year - 670-680,000 tons. But a year a year ago at the same
period potatoes cost 160-200 drams (about 36-45 cents per kilo),
while now it costs 250-270 drams (about 57-67 cents)," Chilingaryan
said, relating these price increases to the Western sanctions against
Russia, because of which export from Armenia to Russia increased.
Chilingaryan expects further negative impact on the economy as Armenia
adjusts to the demands of its membership in the Eurasian Economic Union
(EEU).
"Since we are entering the EEU, the rules of the game will also
change. The goods that we import, and we are an importing country -
almost 70 percent of goods -- customs tax will reach 25-30 percent,"
Chilingaryan said.
According to Chilingaryan price increases create a chain effect.
Seeing that one good is more expensive, all other goods also get
more expensive.
"I am sure that at the threshold of the New Year's Eve, as always
another price increase is not excluded. There are goods that might
be cheaper in Armenia, but they are expensive, and the reason is,
alas, the importers work in the field of monopolies.
There is a concern that meat will also get more expensive,"
Chilingaryan said.
From: A. Papazian