IMF FORECASTS 9.4% INFLATION IN ARMENIA IN 2008
ARKA
Oct 10, 2008
YEREVAN, October 10. /ARKA/. The International Monetary Fund (IMF)
forecasts 9.4% inflation in Armenia this year. Inflation is expected to
go down to 5% by next year, the IMF World Economic Outlook presenting
the IMF staff’s analysis of global economic developments.
IMF expects higher inflation rates in the CIS (15.6% in 2008 and 12.6%
in 2009). Kazakhstan is expected to post 17.6% inflation this year and
9.8% in 2009. The fund expects Russia’s inflation to be 14% and 12%
in 2008 and 2009 respectively. Belarus is expected to record 15.3%
(2008) and 9.6% (2009) inflation. IMF forecasts 13% (2008) and 12%
(2009) inflation in Turkmenistan.
Ukraine is likely to face a harsh economic situation with 25.3%
(2008) and 18.8% (2009) inflation.
IMF has made gloomy forecasts for Azerbaijan with 22.4% (2008)
and 20% (2009) inflation. Kyrgyzstan is expected to post 24.5%
(2008) and 12.2% (2009) inflation. Georgia is likely to record 10%
(2008) and 7.6% (2009) inflation. IMF forecasts 13.7% and 9.7%
inflation in Moldova. Tajikistan is expected to record 21.6% and 15.5%
inflation. The fund forecasts 11.1% and 10.6% inflation in Uzbekistan.
To curb inflation pressure, the CIS members should change taxes and
import prices of first-priority goods, reduce domestic taxes and
offer government subsidies for foodstuffs and fuel, as well as set
benchmarks for exports and quotas, IM F says in the report.
As a result of the four-year hike in prices for foodstuffs and fuel
and the forced cut in output, global market saw record-high inflation,
according to IMF.
The developing economies suffered most as a result of price hikes.
The mains reasons for record-high inflation are the lion’s share
of food supply in the consumer’s basket, still high economic growth
rates and ineffective inflation expectations.
IMF experts say the countries that adhere to the inflation targeting
policy (Armenia was the first country in the CIS to adopt inflation
targeting policy in January 2006 – ARKA) recorded lower inflation. The
increase in unused capacities and stabilization of stock markets will
help curb inflation.
IMF expects 2% reduction of inflation in developed countries next
year. As a result of the latest global financial turmoil, inflation
rate is expected to gradually go down in developing economies.
At the same time, IMF specialist say global growth could come in
below their forecasts.
Armenia is expected to record 4% (±1.5%) inflation this year. The
country posted 3.7% inflation between August and September. Prices
went down 0.7% between July and August.
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