Lack of competition does now allow Armenian prices to respond to international trends, economist says
Lack of free competition in Armenia is a major factor not allowing local prices to respond to international trends, economist Vardan Bostanjyan told ARKA.
According to UN Food and Agriculture Organization (FAO), world food prices fell sharply in August, dragged down by ample supplies and external factors including a slump in energy prices and concerns about an economic slowdown in China.
FAO’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 155.7 in August, down 8.5 points or 5.2 percent from July. FAO said this was the sharpest monthly drop since December 2008.
No so in Armenia, Bostanjyan said, citing the latest data from the National Statistical Service which say food prices rose by 0.3%, while consumer prices went up by 0.1%. According to Bostanjyan, pricing in Armenia is affected by a number of both objective and subjective reasons.
"The dominance of oligarchic monopolies in our small market, who are major importers of food does not allow prices to respond to the international trends,' he said.
He said although the price of Russian natural gas was lowered to 165 US dollars per one thousand cubic meters, prices for end consumers remain the same. He said the same is true of gasoline. While international prices of this fuel continue the drop in Armenia they are not decreasing, and sometimes even increasing.
According to the NSS, gasoline prices in Armenia in August 2015 grew by 0.2% from the previous month, while prices of diesel fuel grew by 0.5%.
"Absence of free competition leads to such disastrous results," concluded Bostanjyan.-0-