Armenia sees hike in inflation, public debt

The year 2021, which is coming to an end, is marked by inflation, rising food prices and mounting public debt in Armenia, Report informs via Armenian media.

Over the past 12 months, inflation in Armenia reached 9.6%, according to the country's Central Bank, with 7% falling to the share of food products.

The prices have been rising in Armenia since the end of last year. Imported goods started to rise in price due to the fall in the national currency's exchange rate, and vegetables went up due to problems with irrigation in spring and summer in the country. The exchange rate has been recovering for several months, but a global problem remains - food prices have risen as the world economy recovers from the COVID-19 shock faster than expected. According to the FAO (UN Food and Agriculture Organization), food prices have broken a 10-year record (devastating for consumers).

Against the background of the economic situation, Armenia's public debt has also increased. As of the end of 2021, government debt increased to 4.275 trillion drams (at current exchange rates - about $8.9 billion) or 63.5% of GDP. In 2022, the government plans to reduce the ratio to GDP to 60.2%.

The government considers public debt manageable. Experts say Armenia is on a dangerous line, on the verge of a debt trap.