The Increase of Prices Announced by the Central Bank of Armenia for 2018 Has Caused Misunderstanding
Recently, the Central Bank of Armenia issued a statement which said that in 2018 there will be an increase of price for a number of consumer goods in the country. The Central Bank explained this by a number of external economic factors, passing through a series of customs tariffs that go into effect on January 1 of the coming year, as well as by the Central Bank's regulatory policy. Besides the negative mood caused by this announcement, the public is also quite doubtful towards CB activities, in the context of artificially increasing prices, which is rather troubling and requires an explanation.
First, it is worth noting that the CB's targeted four-percent inflation, which was mentioned in the statement, is the derivative of the two main reasons - the Customs Union rates and the expected global economy impulses. In other words, the CB policy is based on other factors affecting the goods prices, not equally acting as a factor promoting inflation.
To make it clearer, let us refer to the CB monetary policy and inflation as an instrument of that policy. This policy is aimed at the stability of prices, which is the regulation of money supply and its value (interest rate) in the market. The price stability is, in its turn, not the maintaining of an unchanged level of price or a reduce in prices, as it is widely believed, but rather a policy aimed at keeping the expected price rates within a moderate range. In other words, based on a number of calculations, including all factors contributing to inflation, the CB itself defines moderate inflation to avoid unpredictable price fluctuations. In other words, the definition of the inflation rate by the Central Bank is not preconditioned by the rise in prices but rather the scope of pricing implications of existing prerequisites within certain limits.
Clearly, the CB's targeted inflation rate is determined based on the expectations calculation and is fixed in the RA Law on State Budget.
The idea of a rather complex policy carried out by the Central Bank, of course, will not contribute to mitigating negative moods from the expected inflation, but hopefully it will contribute to the reduction of misunderstanding towards CB activities.
As for the immediate impact of inflation, it should be noted that the moderate price growth in market economies has a long-lasting positive impact on the economy as it is confirmed that inflation is one of the factors that increases production capacities in the country, the benefits of entrepreneurship, which in turn, will have a negative impact on the economic activity and purchasing power of the population.
- 24% Growth in Iran's Non-Oil Trade with Armenia Armenia was the 62nd exporter of goods to Iran over the four months. The imports mainly included sheep, vehicles and diesel engines.
- Armenia Temporarily Suspends Import of Some Products from Russia
- FMD K&L Europe Opens the Region’s Largest Biotechnology Park in Armenia “When I first came to Armenia I investigated the environment and found that the country has highly qualified doctors and biologists. Armenia may become the perfect platform for our company to enter Europe”...
- Armenian Jewelry Introduced in Central Asia Armenian producers have signed export contracts worth of AMD 38m, and the Mitsario Gold has opened a branch in Kazakhstan.
- The Inclusive Growth Is in the Core of Armenia's Development Strategy This is very important in terms of the interests of the citizens of the Republic of Armenia on the one hand, and on the other hand, in order to be perceived as a partner in the international arena.
The Scientific Benefits of Hugging
Declaration of Friendship Signed between Shekher Community of Artsakh and Arnouville Community of France
President Sarkissian will Participate to the Crans Montana World Investment Forum in Geneva
World's Longest Sea Bridge Will Be Opened
Russia Nuclear Treaty: Bolton in Moscow Amid Missile Tensions
"No Chance of Italexit': Italy is not Leaving the EU or the Euro, PM Insists
Man Who Foiled Nazi Nuclear Plan Dies Aged 99
Transfer of the CSTO PA Session from Yerevan to Moscow is a Reflection of the Current Moods
Canada is Running out of Marijuana Two Days after Drug Became Legal
Atmosphere of Mutual Trust has Developed with Putin, says Nikol Pashinyan
Acting PM Nikol Pashinyan, His Holiness Aram I Hold Private Meeting in Antelias (photos)
Nikol Pashinyan Visits Haigazian University, Bzommar Patriarchal Congregation in Lebanon (photos)
Declaration of Friendship Signed Between Shushi of Artsakh and Saint-Étienne of France
Donald Trump. the USS is Pulling out of the Landmark Intermediate-Range Nuclear Forces Treaty with Russia
Pomegranate Festival Held in Artsakh (photo)
EU Cannot Accept Temporary Measure On Irish Border
J. Warlick: US Administration Shows No Interest In Karabakh conflict
Trump Says US will Withdraw from Nuclear Arms Treaty with Russia
The Replacement Of The CSTO Chief Will Be Completed As Soon As Possible
Nikol Pashinyan, Saad Hariri Discuss Prospects of Bilateral Relations Between Armenia and Lebanon
Brigitte Macron: We Feel So Good in Armenia that We Don't Want to Leave
In Honor of Canada’s Prime Minister Justin Trudeau, RA Prime Minister Nikol Pashinyan Gave Official Dinner (photos)
Macron: April 24 to be Remembered in France as the Day of Remembrance of the Armenian Genocide
It Is Suggested in Armenia to Rename one of the International Airports in Honor of the Great Chansonnier Charles Aznavour
Justin Trudeau: Many Years ago I Had the Opportunity to Visit Armenia with my Father during Summer Holidays
German Publicist about Erdogan's Visit: You Mean the Carpet, which Is Painted with the Blood of Armenians?
Aliyev Criticized International Observers' Assessment on the Yerevan Council of Elderly Elections before the Election Results Were Published
Sharmazanov to Speaker of Azerbaijani Parliament: You Should Recognize the Full Exercise of Artsakh People’s Right of Self-Determination
Artsakh's Defense Army Serviceman Artsakh Hovsepyan Posthumously Awarded with the "For Service in Battle" Medal
Humanoid Robot Sophia Delivers Remarks at Yerevan La Francophonie Forum, Vows to Learn French for Next Time
Wind: 4.83 km/h