Friday, December 27 2013 20:33
Head of Central Bank: Armenia registers inflation below 6% in late 2013
ArmInfo. On December 27 the Central Bank of Armenia (CBA) held a traditional New Year reception. Members of the Armenian Government, representatives of the financial system, international financial organizations and other officials attended the reception.
CBA Chairman Artur Javadyan wished Happy New Year and Merry Christmas to the guests. He said Armenia registered inflation below 6% at the end of 2013, and this can be considered a good result amid the changes in energy tariffs and their indirect effects. He recalled that the beginning of the year 2013 was marked by low inflation environment and high economic activity, but the changes in energy tariffs have considerably changed the macroeconomic situation. To dampen the possible secondary impact and neutralize the expectations, the CBA first raised the refinancing rate (from 8% to 8.5% in August) and then gradually reduced it (to 8% in November and 7.75% in December), when the inflation environment was dampened and the economic activity started to decline.
According to Javadyan, in 2013 Armenia's financial system became even more stable, this boosting further integration of the real and financial sectors. "As of today, financial assets make up 74% of the GDP against just 30% some five years ago. The share of loans in the GDP today is 43% against 18% in 2008," Javadyan said.
He said that one of the key priorities of the CB was the pension reform, with two large European companies, Amundi-ACBA-Asset- Management (France) and C-Quadrat Ampega Asset Management Armenia (Germany-Austria), attracted to the market in Nov 2013.
Javadyan pointed out some more achievements of the year: loans grew to 1.7tln AMD from 615bln AMD five years ago, while the interest rates dropped by 3-4%; financial services became more accessible; financial intermediation and corporate governance got more active; people grew more competent and confident in financial services. As a result, deposits grew to 1.45tln AMD from 450bln AMD in 2008.
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