According to official figures, over the past year prices for non-food goods in Armenia increased on average by 1.7%, but the physical volume of sales of goods in shops in the past year decreased by 13.4% and at outdoor markets by 3.6%.
The reason is that the incomes of the population have dried up because of the tremendous reduction in money transfers, mainly from neighboring Russia. This naturally has led to a reduction of solvent demand, including for clothing and footwear. According to one Armenian businessman, the decline of sales of certain products of his business in the domestic market has reached 30-40%.
There are a lot of problems in the light industry sector of the country, many of which have not been able to be solved for a quarter of a century, despite the abundance of government programs for the development of industry and the creation of new jobs. Now, among other things, another problem has been added. As the co-chairman of the Union of Light Industry Employers of Armenia Hovsep Poghosyan noted, it has become difficult to sell products in Russia, News.am reports.
According to the data of Armenia's foreign trade in 2013, when the economic crisis in Russia had just begun, the total volume of imports of light industry products (including raw materials for its production) in the country was nearly 190 million dollars.
However, exports of these goods (including tariffs) were several times lower - about 41 million dollars, of which slightly more than 3 million dollars went to Russia. According to Armenian analysts, sharp inflation in Russia has affected the real solvency of the population. As a result, the physical volume of sales of goods decreased by a significant 10% last year. That is, Russians began buying fewer goods, including those imported from Armenia.
The differences between the two countries lie in the fact that in Armenia the nominal incomes of the population decreased (the size of population decreased as well), but they increased in Russia. Inflation there was provoked by both the reduction of resources of a number of goods (due to the refusal to import food products from the countries that have introduced sanctions), and the collapse of the ruble against the US dollar (which has reflected on import prices), and so on.
Armenian entrepreneurs are trying to find a way out of this situation, but to no avail yet.
