What problem can a 2% cashback solve when bread prices have risen by 3.5%?

It is becoming increasingly difficult to convince ordinary citizens that their lives have improved. Armenia’s official statistics have published data on current consumer prices, formally recording the situation that each of us encounters in everyday life.

True, inflation remains within the established target of 3.7%, and at first glance, there seems to be no problem. However, this average figure of 3.7% is calculated across a wide range of goods and services, while essential items and food have risen much more sharply.

Food products, for example, have increased by 5.6%. Beverages and tobacco rose by 6.8%, while healthcare, education, and transport services increased by 3.5%, 8.3%, and 4.9%, respectively.

Each of these categories, upon closer examination, points to a more complex situation. Let us consider food products as an example.

Bread has risen by 3.5%, flour by 6%, pasta by 8.2%, vegetable oil by 18.6%, and butter by 12.3%. Prices for dairy products, fruits and vegetables, and meat have also gone up. In a situation where vegetable oil has risen by nearly 19% or meat by 3.5%, it is fair to say that the average consumer price index of 3.7% does not reflect the real cost of living.

One of the most effective mechanisms for combating inflation is income indexation—real and, most importantly, adequate indexation.

Speaking of the planned 2% cashback system on cashless transactions, which is set to be introduced in 2026, we should immediately note that we do not underestimate the acute need of our population for this 2%. This, too, reflects the real indicator of well-being.

Yet each person, depending on their purchases, can make a simple calculation by looking again at food prices and considering what problems this refund will actually solve—apart from its role in pre-election campaigning ahead of the upcoming elections.