By Rashid Shirinov

The new wave of price hikes, which started in Armenia from the beginning of 2018, continues causing resentment of broad masses in the country.

Last Friday, the opposition bloc “Yelk” (“Exit”) marched in Yerevan to protest against the rise in prices.

“It is clear that the price increases will take place throughout the year, and they will be especially acute in March and April,” MP from Yelk Aram Sargsyan told journalists. He stressed the need for liberalization of the economy in Armenia and for strengthening measures to reduce the shadow economy.

Alexander Okhrimenko, a well-known Ukrainian economist, believes the Armenian government is, most likely, more concerned about not hurting their friends doing business in the country. Therefore the authorities help them not to pay much tax, but to hide more money offshore, he added.

“A right-minded power should think not only about how to get more tax from the population, but about how to ensure that the business pays much tax rather than hiding profits offshore,” the expert said in an interview with Azernews on January 22.

Following the amendments to the Tax Code and the increase of excise taxes in the first days of 2018, the prices for gasoline, gas and diesel fuel rose in Armenia. Okhrimenko notes that it is very beneficial to the government to use excise for fuel to fill the state budget deficit, since everyone buys fuel "In fact, the population is filling the budget gap of Armenia," he noted.

“In addition, rising fuel prices lead to higher prices for food. There is a direct relationship – once fuel prices are increasing, food prices go up, since the cost of these products is growing,” the economist noted.

It is clear that the Armenian authorities are going to fill the budget gap and pay off the country's debts, which amount to almost $7 billion, from the pockets of ordinary population of the country. The interesting point is that overwhelming majority of the economic and social problems that today’s Armenia faces showed up after the occupation of Azerbaijani territories in early 1990s. Therefore, it is safe to say that Armenia’s withdrawal from the occupied lands of Azerbaijan would benefit Armenia itself.

 “War always means huge costs. In fact, the Armenian population with its money pays for excessive military expenses,” Okhrimenko mentioned.

The expert added that military spending is always ineffective and it comprises a lot of corruption. “Therefore, the state budget is always in deficit, while the generals’ acquire more and more houses,” he concluded.