Importers in Armenia grappling with low purchasing power
By Mushvig Mehdiyev
Decline in the number of population and purchasing power in Armenia seriously affected the imports, making it go down.
Large importers in the post-Soviet country expect more modest spending by the people in the new year. That prediction urges them to revise their seasonal import plans.
Importers intend to bring in 5-10 percent less goods to Armenia compared to their regular amount of importation. Two main problems - decreasing number of the population and weakening purchasing power - are behind the reduction in imports.
Money inflow into Armenia is on a catastrophic decrease amid the sharp fall of the Russian ruble. Particularly the remittances from Russia has dropped for the fourth month in a row since June. Migrant money from Russia plays a vital role for low-income and socially vulnerable Armenians, portraying their power of purchase. So, the decrease in private money transfers from the overseas delivers a hard blow on the common purchasing power in Armenia.
Importers have already predicted the stagnation in Armenia's domestic markets before the sudden devaluation of the Armenian dram. Now, the ruble is going to hit the record low, losing its value nearly by 23 percent against the euro and 30 percent against the dollar. This trend is a SOS signal in Armenia given the huge influence of the Russian economy on it. So, the importers warned on a deficit of several goods in the markets on the new year's eve.
Armenian markets are also observing a price hike, which is conditioned with the decrease in the weight of goods and increase in their market prices.
"Hike in the prices of nuts, buckwheat, meat, even bread is currently observing in the markets of our country," said Armen Pogosyan, Head of the Association of Armenian Consumers.
Pogosyan said Armenia spends about $90 million to import goods from foreign markets instead of producing those goods. "Allocating $20 million to production measures would help the local farmers to cultivate the imported goods here in Armenia."
The National Statistics Service has recently reported a 1.8 percent fall in the overall production of bread in Armenia. About 219 tons of bread produced in the first nine months of this year compared to nearly 222 tons of production of the vitally essential food product last year.
Declining bread production is reportedly linked to the weak consumer demand and purchasing power in the country. Moreover, the emigration from the country plays a negative role to worsen the situation in markets. The resident population in Armenia was 3.02 million last year until the official data revealed about 54,000 permanently emigrated residents this year. Decrease in a demand for bread is directly proportional to the fall in number of the population. Seems, the Armenians want to eat bread abroad instead of meeting their daily intake norm in their native land.