The Eurasian Development Bank (EDB) has released its forecast for Armenia’s monetary policy, highlighting the anticipated conclusion of the key interest rate reduction cycle, which is expected to align with the achievement of a new inflation target.
According to the EDB, the Central Bank of Armenia (CBA) will continue its monetary easing until the first half of 2025. The latest refinancing rate cut occurred on December 10, bringing it down to 7%, driven by slower wage growth and declining inflation expectations. Annual inflation in November stood at 1.4%, up from 0.6% in October.
A significant factor in the forecast was the CBA's historic decision to revise its inflation target for the first time since 2006, lowering it from 4% (±1.5 percentage points) to 3% (±1 percentage point). This new benchmark has already been incorporated into the state budget for 2025.
Earlier, BMG reported that for the first time since 2006, the Central Bank of Armenia is adjusting its key inflation goal, reducing it from 4% to 3%. According to the CBA's statement, this decision, set to take effect in 2025, reflects the increased maturity of Armenia’s economy and aims to enhance the purchasing power of its population and the country’s investment attractiveness.
