Armenia continues to experience low inflation, with an annual rate of just 0.6% as of October—significantly below the Central Bank's projected 2%. This situation could prompt another reduction in the refinancing rate as early as December, according to analysts at the Eurasian Development Bank (EDB) in their weekly report.
Deflation is particularly noticeable in the food sector, where prices have decreased by 0.5% year-over-year. Price growth in the services sector has also slowed, down to 3.3% from 3.6% the previous month, while disinflationary trends are strengthening in the non-food sector as well.
On October 29, the Central Bank of Armenia's Board decided to cut the refinancing rate by 0.25 percentage points to 7.25%.
Meanwhile, the inflation target set in Armenia’s 2024 state budget is 4%, with a possible deviation of 1.5%. The Central Bank forecasts a more moderate price growth: 2.1-2% in 2024, 3.2-4% in 2025, 3.8-4.2% in 2026, and 4% by 2027.
Earlier BMG reported that Martin Galstyan, the Governor of the Central Bank of Armenia, recently announced plans to lower the target annual inflation rate from 4% to 3%. He believes this adjustment will help create an economic environment with lower interest rates.
