FOREX CLUB: INFLATION RATE IN ARMENIA'S 2011 GOVERNMENT BUDGET GIVES ROOM FOR ECONOMIC RECOVERY

ARKA
November 1, 2010
YEREVAN

YEREVAN, November 1. /ARKA/. The inflation rate projected in Armenia's
2011 government budget is a comfortable corridor giving the country
room for recovering and developing its economy, Mikael Verdyan, analyst
at FOREX CLUB Group, said Monday in Novosti International Press Center.

In the 2011 draft budget, inflation is projected at 4% (1.5%).

"The level we have now and the projected range are goals of our
regulator," Verdyan said answering the question ARKA News Agency put
to him.

Nikolay Ivchenko, head of FOREX CLUB Group's information and analysis
center, who spoke at the same press conference, said that national
currencies of Armenia, Kazakhstan, Ukraine and Moldova strengthened a
great deal against the U.S. dollar, and this has some adverse impact
on Armenia's export.

He said pointed out that inflation in Armenia is rising quite rapidly.

That is why, he said, the country should choose between enlargement of
its export and curbing inflation o support ordinary people's welfare.

"I think Armenia is moving toward export enlargement so far," he said.

"I don't rule out that the dram may keep revaluating also throughout
the next year, but the upward movement of inflation is expected to
slow down instead."

Ivchenko also said that many CIS and East Europe countries will
vigorously strengthen their currencies against the dollar.

Armenia faced 7.9% year-on-year inflation in Jan-Oct 2010.

In the country's 2010 government budget, annual inflation is projected
at 4% (1.5%).

Ivchenko said he finds it wrong to deter national currencies from
devaluation artificially.

He predicted that many CIS and Asian countries would stop doing it
and would embark on more liberal monetary policy.

The economic analyst thinks that some countries, such as Armenia,
Kazakhstan, Ukraine, Moldova and Azerbaijan, and especially Central
Asia, should pursue more flexible monetary policy to enhance
effectiveness of their economies.




From: A. Papazian