Yerevan/Mediamax/. Deputy Executive Director of “ARARATBANK” David Harutyunyan stated in an interview to Mediamax that toughening of monetary-credit policy by the Armenian Central Bank will lead to certain positive results in deterring inflation in short-term prospect, but at that will slow down the revival of economy.

According to him, in long-term prospect, Armenia should deal with high inflation by means of institutional reforms.

David Harutyunyan expressed an opinion that the high level of prices that has been formed in Armenia is conditioned by external inflationary pressures and last year’s low harvest level in Armenian agriculture.

Speaking of external factors of inflation, David Harutyunyan indicated the fact that starting from 2008, central banks of many countries poured significant volumes of liquidity in their economies basing on intensions to mitigate the influence of economic crisis and stimulate economy, as a result of which the monetary mass increased, as compared to the mass of the goods, and this fact led to formation of inflationary pressures after some time. Besides, David Harutyunyan stated, because of last year’s low level of harvest increase in price for a number of essential goods (grain crops, sugar, etc) and fuel took place. Deputy Executive Director of “ARARATBANK” noted that the increase of aggregate demand in China and India also contributes to increase in inflationary pressures.

1.9% inflation was registered in February, 2011, as compared to the previous month, in conditions of which the index of 12 months’ inflation increased by 1.8 percentage points, as compared to January index, and made 12.4%.

Commenting on the fact that the level of inflation observed in Armenia is higher than in many European countries, David Harutyunyan stated that this fact is conditioned by the importing structure of Armenian economy. “In January, 2011, the volumes of import (USD 255.3mln) exceeded the volume of export (USD 66.3mln) almost fourfold, and this fact has its effect on domestic prices through prices, formed in external markets”, David Harutyunyan stated.