Martin Galstyan, Chairman of the Central Bank of Armenia, announced at a press conference on June 11 that inflation in the country is expected to increase by the end of the year.
Currently, inflation is slightly above 0%, with the 12-month inflation rate continuing to decline in the second quarter of 2024, reaching 0.3% in May and -0.5% in April.
"By the end of the year, inflation will be higher, approaching 2-2.5%, depending on developments in agriculture. The Central Bank forecasts that in the medium term, inflation will reach the target level of 4%. We aim to implement a smooth policy and avoid abrupt measures. For instance, when inflation spiked due to the pandemic two years ago, we gradually increased the interest rate instead of making sharp adjustments," Galstyan noted.
He emphasized that the current policy is directed towards achieving the target inflation, taking various factors into account. Galstyan assured that next year, inflation in Armenia will approach 4%, which he considers a reasonable level.
Earlier, BMG reported that on June 11, the Board of the Central Bank of Armenia decided to reduce the refinancing rate by 0.25 percentage points, setting it at 8%. The Central Bank has been reducing the refinancing rate since June 2023, aiming to make financial resources more accessible amid low inflation rates.
The state budget of Armenia for 2024 projects an economic growth rate of 7% and sets the inflation rate at 4% (±1.5%).
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