ARKA News Agency, Armenia
Dec 26 2007

Inflation to total 7% in Armenia in 2007, CBA chairman says

YEREVAN, December 26. /ARKA/. 7% inflation will be recorded in
Armenia in 2007, 2.6% of which being a result of monetary factors,
Chairman of the Central Bank of Armenia (CBA) reported the ARKA News
Agency.

The main obstacle CBA had to face while implementing the
monetary-credit policy was the world economic trends of 2007,
according to Sargsian.

`The world goods markets surprised us and seriously affected the
world economy,’ he said.

First of all, this was the rise of prices of bread, bread-made
products and butter. Moreover, oil prices have also increased since
early 2007. According to CBA Chairman, these factors influenced the
world prices and countries with transitional economy suffered greater
losses than countries with developed economy, as the above mentioned
products have a lion’s share in the consumer basket in developing
countries.

As a result, inflation exceeded the expected notch in countries with
transitional economy, according to Sargsian. `Inflation in the CIS
exceeded the expected rates by 4%, while in Russia it totaled 12%.
High inflation rates are expected in Georgia, Azerbaijan, twice
higher than in Armenia,’ he said.

Inflation totaled 6.8% in Armenia in November 2007 against 5.7% in
October 2007 – 1.3pct increase of target inflation (4+/-1.5%). At the
same time, inflation as a result of monetary factors (excluding the
rise of prices of bread-made products, vegetable oil and ghee as a
result of the increase of world prices) totaled 2.9%. -0–