Government Raises Pensions, Poverty Benefits

YEREVAN (RFE/RL)–The Armenian government approved on Thursday more than ten percent increases in pensions and poverty benefits, citing the need to cushion the effects of rising consumer prices in the country.

Officials said the measure is primarily aimed at partly offsetting a 37.5 percent rise in the price of natural gas for Armenian households which will take effect on April 1. The government pledged earlier to consider compensating the most vulnerable segments of the population.

Meeting in the southern town of Artashat, it decided to raise monthly benefits paid to tens of thousands of low-income families by 15 percent from May 1. The pension rise, effective from November 1, was set at 11 percent.

“We are dealing with not only the increase in the gas price but a broader high level of inflation,” Prime Minister Tigran Sarkisian told the cabinet meeting. “These decisions can substantially alleviate socioeconomic problems in Armenia,” he said.

According to official statistics, consumer price inflation in Armenia jumped to 8.2 percent in the first two months of this year, twice exceeding a full-year target set by the government and the Central Bank. Sarkisian said the authorities will do their best to cut the inflation rate to 6 percent by the end of the year.

The pension and benefit increases were not envisaged by Armenia’s 2009 state budget. Finance Minister Tigran Davtian said they will cost the government at least 6 billion drams ($15.2 million). Davtian assured fellow ministers that the government will succeed in raising this sum “including through savings.” He did not elaborate.

The gas tariffs already rose by 14 percent in April 2009, resulting in a 20 percent increase in the retail prices of electricity. State utility regulators said earlier this month that the energy fees will remain unchanged at least until August despite the increased cost of Russian natural gas delivered to Armenia. The gas is used for generating roughly one-third of the country’s electricity.


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