In December 2024, Armenia's annual inflation rose to 1.5%, marking the highest level since April 2023. Meanwhile, the Central Bank continued easing its monetary policy, lowering the refinancing rate to 7%.
According to the World Bank's monthly economic report, the inflation increase in December was driven by a rise in food and non-alcoholic beverage prices to 2% year-on-year, up from 1.7% in November, and a hike in medical service costs to 3.2% from 2.5%. At the same time, prices for clothing and footwear (-2.6%), furniture and household appliances (-2.5%), and housing and utility services (-0.2%) continued to decline. The average inflation rate for 2024 stood at 0.3%, compared to 2% in 2023.
The banking sector showed growth in both deposits (up by 2.3%) and loans (up by 2.6%) on a monthly basis, driven by transactions in the national currency. On an annual basis, adjusted for foreign exchange revaluation, deposits increased by 10.4%, while loans grew by 22.1%. The capital adequacy ratio of banks slightly decreased to 20.4%, while the share of non-performing loans remained low at 1.2%.
