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The World Food Programme carries out market analysis on monthly basis to monitor the market situation in Armenia.
Observing foreign currency exchange rates (namely USD and Russian Rouble) and retail market price fluctuations WFP tries to draw possible implications on the overall socio-economic situation and purchasing power of the society. Based on the interest, the bulletin contains descriptive information about the market prices of selected food and non-food items. The bulletin also includes a snapshot of the rainfall and vegetation levels per region.
This bulletin focuses on market prices of the period of July 2021 – July 2022. Main sources used for the bulletin are the Statistical Committee of RA, Central bank of Armenia and WFP VAM Dataviz.
HIGHLIGHTS
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The exchange rate of USD/AMD keeps decreasing since the end of March 2022, declining 17.4 percent in July 2022. The exchange rate of RUB/AMD has greatly increased since March 2022 and average exchange rate in July is 7.08 AMD per 1 Ruble.
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Armenia continues encountering price increase of both food and non-food items. Consumer Price Index increased by 9.3 percent compared to June 2021. Food inflation was 13.6 percent in Armenia in July 2022 compared to July 2021, hence negatively influencing access to food particularly for vulnerable households. The highest price increase among food groups was for fruits: 21.7% in June 2022. The increase of food and non-food prices in combination with other factors, such us the price increase of agricultural goods, fertilizers, services, etc., is going to affect the population in Armenia, especially the most vulnerable households decreasing their purchasing power.
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The highest rates of food price inflation were seen in Yerevan (10.1%), Kotayk (9.3%), Gegharkunik (9.1%) and Lori (8.8%) regions in July 2022 versus July 2021. The lowest rate of food price inflation was observed in Shirak (7.5%) for the reporting period.
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Price increase of fuel (diesel by 44 percent and petrol by 9 percent) in July 2022 compared to the same month last year (July 2021).
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Factors influencing price hikes continue to be the political situation in the world resulting in changes in cargo and passenger logistics, transportation costs, price increase in countries of import tailored with domestic shocks such as inflation, unavailability of effective irrigation systems, increasing fuel prices globally, limited state regulation mechanisms to curb inflation and weak shock responsiveness.
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Climate changes, in particular the volatility of rainfall, affect agricultural production in Armenia. In July 2022, in all regions the actual rainfall rates were lower than it was expected.