1 Apr 2010 16:57

Armenian govt forecasts 7% inflation in 2010

YEREVAN. April 1 (Interfax) - Armenia will have 7% inflation in 2010, Prime Minister Tigran Sargsyan said at a government session on Thursday.

"According to current estimates, we target inflation of 7% in 2010," he said.

Inflation was 0.8% in March 2010 compared with February, which is an improvement compared with the first two months of the year. Inflation in March was 2.9% compared with December 2009. In annual terms (March 2010 compared with March 2009) inflation was 8.8%.

"The government and the Central Bank believe that inflationary pressure can be held in check through the end of 2010," Sargsyan said.

High inflation is a big problem, he said. "We have arrived at the stage of high inflation, due to expansive fiscal policy and tax and budget policy. That policy stimulates economic growth on one hand but creates inflationary pressure on the other. A key task for the government and the Central Bank is to carry out measures to rein in inflation," he said.

Higher prices for natural gas beginning April 1 will directly add 0.5% to the inflation rate and indirectly add another 0.9%.