Martin Galstyan, Chairman of the Central Bank of Armenia, summarized the country’s economic performance for 2024 in an interview with Public Television, describing it as a year of growth and development. According to him, after a phase of exceptionally rapid expansion, Armenia’s economy is now returning to more sustainable growth rates.
Discussing the financial sector, Galstyan highlighted the high profitability of Armenia’s banking system, with a return on equity of around 18% annually. Banks possess a significant capital buffer: regulatory capital stands at approximately $4.3 billion, and total assets have reached $25.4 billion, equivalent to the country’s GDP.
"The system is highly liquid and fully capable of meeting all its obligations seamlessly," Galstyan emphasized.
One notable development in the banking sector, he said, is the government's initiative to address non-performing loans. Banks will write off all accumulated fines and penalties over the years. Additionally, the Central Bank has proposed reducing the inflation target to 3%, which Galstyan noted aligns better with public perceptions of price stability. This move aims to lower long-term interest rates and reduce inflation volatility.
Galstyan placed significant focus on monetary policy in his remarks. He reiterated that unlike inflation, the exchange rate is not a target for the Central Bank. Armenia’s floating exchange rate policy enables the country’s small, open economy to use the exchange rate as a shock absorber.
"Everything in the foreign exchange market is determined by supply and demand. The Central Bank has only one clear rule for market intervention — when the normal functioning of the market is disrupted," Galstyan explained.
In conclusion, the Central Bank chairman noted that the monetary policy implemented in recent years has fostered greater public trust in the national currency. In his view, a stable and predictable macroeconomic environment is a prerequisite for attracting investments, which are critical for sustaining economic growth.
