1. sdgsdghdh ՀՀ ԱՎԾ գների վիճակագրության և միջազգային համադրումների բաժին Price Statistics and International Comparisons Division of NSS RA

3. Prices and Price Index Consumer (CPI)Producers Freight Transportation Realization of Agricultural products Construction Producers Product Import International Comparisons (Prices) Agricultural production means Foreign Trade Export Investment Consumer Non-food Food Services Non-market Gross Domestic Product Deflator Construction components

4. Organization of work The Consumer Price Index in Armenia has been calculated since 1993. The methodology of CPI calculation has been developed together with IMF and fully corresponds to international standards. The price statistics and International Comparisons Division of NSS RA is responsible for the calculation and production of CPI in Armenia. 8 employees work in the Price Statistics and International Comparisons division of NSS RA, 2 of which are engaged in collection of information and analysis necessary for CPI publication. The observations include the regions (Marzes) of Armenia (11 settlements) as well as the capital city Yerevan and the prices are collected by 35 price collectors. The prices and tariffs of some commodities and services (those which are regulated by the government, mobile and internet communication and other services) are collected by the staff of Price Statistics and International Comparisons division in the central office of NSS RA.

5. CPI observation field  The monthly calculations of consumer price index is carried out since 1993 in Yerevan and in 10 cities (11 cities since 1996), basically in 10 out of 11 Marzes (except Ararat Marz) according to defined methodology. Since 2004 price collections have been organized in Ararat Marz as well and since then Ararat Marz is also included in CPI calculations of RA.  5 years after the introduction of CPI calculations, since January 1998 the list of observed commodities-services was revised, making it from 330 commodities-services into 400 and since 2008 this number became 470 (337 consumer items of which 158 is food products and 219 non-food products) and 93 service types  Currently the calculation of CPI includes 901 name of representative commodities (services)  Prices (tariffs) are surveyed for each of the items at 9-12 previously selected commercial and service enterprises in the each of the observed settlements. In general about 250.000 price data are registered and analysed each month in RA.

6. CPI The CPI defines the ratio of total value of goods and services in the fixed basket at the current period's prices compared with the value of the same basket at the prices of the base period. The CPI in Armenia doesn’t include the prices of capital property, such as the prices of house or land, the prices of goods and services consumed by the enterprises or by the government, expenditures made by foreign citizens, as well as conditionally calculated prices of owner – occupied housing services. CPI is the only measure of inflation in Armenia. CPI is used for recalculation of macroeconomic indicators in current prices with comparable prices, i.e. is used as a deflator for recalculation of indicators of National Accounts with fixed prices. The CPI is classified according to COICOP classification.

7. CPI methodological clarifications Prices (tariffs) are surveyed for each of the items (470 items, representatives of 901 commodities- services) at 9-12 previously selected commercial and service enterprises in each of the observed settlements. Price data are collected 3 times per month and provided by the regional agencies of the NSS RA to the Price Statistics and International Comparisons division of NSS RA before the 23 -rd day of the current month, where the data us being checked, summarized and CPI is calculated each month. The price data are recorded by price observer statisticians through paper reporting forms by visiting selected outlets. Tariffs of some services (which are the same for the whole country) as well as tariffs regulated by the government are recorded directly in the Price Statistics and International Comparisons division of NSS RA responsible for the calculation of CPI. Prices for some commodities-services are collected via internet as well as on the phone.

8. Monthly schedule of price collections Monday307142128 Tuesday18152229 Wednesday29162330 Thursday310172431 Friday4111825 Saturday5121926 Sunday6132027 Price collection dates

9. CPI observation field 1. The list of trade and service outlets chosen for price collections based on the observed cities and types of trade outlets. YerevanGyumriVanadzorVaghar shapat TalinDilijanHrazdan Charencavan Yegheg nadzor MartuniKapanArtashat Total Total number of observed outlets 609291216194172168387170173174175 2729 including supermarket 752 1 1 117 food store 4912 962481112 119 non-food store 7012312010080 20080 1093 Agriculture food market 81111111111 18 Fair 61111111111 16 Service facilities 51415280 16080 1466

10. The number of commodities- services observed for CPI

11. HICP sample size (approximately per month) in EU countries (2010 or 2011) CountryNumber of itemsNumber of outletsNumber of collected prices Armenia 901/ 470 2729 111850 Belgium53910000120000 Bulgaria613 33768 Czech Republic700800055000 Denmark761165023000 Germany73330000300000 Estonia585180018200 Ireland608400061435 Greece Spain49033000 France102327000 Italy596 580000 Cyprus914173516353 Latvia486210019300 Lithuania887390065330 Luxembourg2276807500 Hungary960960077000 Malta42380095000 Netherlands1191900062703 Austria780420046000 Poland1400/291 Portugal 14500 Romania1979710097000 Slovenia669130016500 Slovakia7021340083800 Finland471243050000 Sweden370160042000 United Kingdom68720500180000 Norway8262500350000 Switzerland1009270048270 Source:Eurostat

12. The number of consumer prices in different countries Number of population (million) Number of collected prices (thousand) Number of collected prices calculated per 1 million population (thousand) Luxemburg0.46.6615.162 Ireland3.842.3811.056 Denmark5.325.004.674 Sweden8.929.903.366 Greece10.933.693.082 Nederland16115.527.226 Spain40.5119.142.943 Italy57288.555.066 United Kingdom59130.982.220 France60.9171.092.809 Germany82.3326.623.971 15 EU Member countries378.81.584.5394.184 Armenia3.2111.8534.953/23.302 Russia142.9617.394.320 Belarus9.746.004.742 Ukraine47.3275.005.814 Kazakhstan15120.008.000 Azerbaijan8.9108.5012.190 Turkey75.0370.004.933

13. CPI Methodological clarifications The CPI is calculated both as a whole and for 3 main groups Foodstuffs (including alcoholic beverages and tobacco) Non-food goods Services The CPI is also calculated for 10 divisions, 67 classes and 470 commodities –services of Classification of Individual Consumption by Purpose (COICOP) classification. The data is published on the last working day of the reference month. The consumer price index is published monthly.

14. Weights of commodity groups

15. Weights of the observed marzes The survey covers 10 marzes and capital city Yerevan, which are weighted according to the number of population, general goods turnover, and the indicators of volumes of services provided to the population.

16. Forms of dissemination of CPI Annual Publications The Statistical Yearbook of Armenia is available in Armenian, English and Russian The Armenia’s Marzes and Yerevan in Figures statistical handbook is available in Armenian and English Armenia in Figures statistical handbook is available in Armenian and English The Prices and Price Indices in the Republic of Armenia statistical handbook is available in Armenian News release Main Macroeconomic Indicators describing the Republic of Armenia’s socio-economic situation is available in Armenian.

19. CPI development processes and objectives Reduction of the number of price collections Various calculations and analysis had been carried out. The pilot calculations of Consumer Price Index had been calculated for the period of January-December 2011 and January-June 2012, based on the example of Yerevan city.  Instead of 3 times collection of prices and tariffs for each month, taking the average calculations of 470 name of commodities-services available in CPI (901 individual items of commodities and services, representative) at the beginning of each month as of 1 st day of each month observed price information, by keeping only the observed price information as of 10 th and 20 th dates. The summarized indicators are shown in the table 1.

20. CPI development processes and objectives The reduction of number of price collections Table 1 *) Price increase compared to previous month

21. CPI development processes and objectives The reduction of number of price collections (by two observations) Table 1 a *) price increase compared to previous month **) cumulative from the beginning of the year ***) to the same month of the previous year

22. CPI development processes and objectives Reduction of the number of price collections  Instead of 3 times collection of prices and tariffs for each month, taking from the average price calculations of 470 categories of commodities –services available in CPI (901 individual items of commodities and services, representative) at the beginning of each month as of 1 st day of the month observed price information, keep only the observed price information as of 10 th and 20 th dates, by keeping only the 3 times observations of 44 agricultural products under the group named fruits, vegetables and potatoes. Summarized indicators are shown in the Table 2.

23. CPI development processes and objectives The reduction of number of price collections (fruits, vegetables kept for 3 times) Table 2 *) price increase compared to previous month

24. CPI development processes and objectives The reduction of number of price collections (fruits, vegetables kept for 3 times) Table 2 a Table 2 a *) price increase compared to previous month **) cumulative from the beginning of the year ***) to the same month of the previous year

25. CPI development processes and objectives Conclusion According to those calculations, the price inflation for Yerevan city in December 2011 compared to 2010 was 9.2% instead of 9 %, in case if the price collections for all commodities-services will be carried out 2 times in a month, thus making the difference in 0.2 % points (see table 1). And in case of 3 times price collections of vegetables and potatoes, the total price inflation remained unchanged, with variation of 0.0 % (table 2). The monthly inflation deviation ranged between 0.4-0.7 % for the first case, and for the second case it ranged between -0.2 up to 0.2 % points. Hence  The impact of fruits, vegetables and potatoes is big the overall CPI  The commodity group of fruits, vegetables and potato has high seasonality, due to which their price vary during different times of the year and even during a month have drastic f;uctuations and hence to keep the existing price collection procedure for those items and conduct price collections three times in a month ( On the 1-st, 10-th and 20-th of the month and days close to these dates),  The changes of prices for the rest of the commodities and services included in CPI calculations are not that significant in a month and their impact of CPI is not big, hence, to reduce the number of price collections for those commodities and services from three to two in a month, on the 10 and 20 th of the month and days close to these dates.

26. CPI development processes and objectives Conclusion (continuation) As a result we will have Almost 25-30 percent reduction of workload of the price collectors which  Drastically improve the quality of price collectors  Avoid unnecessary and in some cases artificial price collections  Increase the responsibility of price collectors  To involve price collector statisticians more into the activities related to assessment of representative items - services and in the process of annual revision and updating of those  Make appropriate methodological and programmatic –technological changes in Armenia, for calculation of CPI and HICP, in future by keeping only HICP  To carry out the revision of weights, composition and structure of commodities-services more often (possibly once a year) for CPI calculations, by replacing them with new representative items - service types.  To give instructions and conduct relevant training workshops for price observer statisticians

27. Thank you for your attention !