12-month inflation will gradually decline in Armenia – Central Bank

YEREVAN, FEBRUARY 1, ARMENPRESS. According to the estimates of the Central Bank, the external sector will still have an inflationary impact on the economy of Armenia, but the Bank expects that the 12-month inflation will gradually decline and will approach the targeted 4% figure in a predicted horizon.

During a press conference today, Governor of the Central Bank of Armenia Martin Galstyan reminded that during today’s session the Board of the Central Bank decided to raise the refinancing rate by 0.25%, setting it at 8.0%. The 12-month inflation in December 2021 declined, comprising 7.7%.

“The 12-month inflation declined in accordance with the CBA forecasts and comprised 7.3%. the economic recovery continues in main partner countries of Armenia”, he said.

Another wave of the pandemic is spreading in Armenia at rapid rates, however, according to the CBA Governor, its impact on the economy is estimated as “mild”. A high economic activity was registered in construction and industry branches in late 2021. The Board of the Bank agrees that the total demand remains high at the expense of external demand which contributes to the maintenance of inflationary environment.

Therefore, the Board found it appropriate to raise the refinancing rate. “As a result of these policy actions the 12-month inflation will gradually decline and will approach the targeted 4% in the predicted horizon. The Board believes that the uncertainty with macro-economic prospects conditioned by geopolitical developments is still high. In case of risks, the Board will respond adequately and will ensure the price stability goal”, Galstyan said.