Tuesday, August 3 2021 23:54
Karine Melikyan

Central Bank of Armenia: Maintaining uncertainty restrains rapid  economic recovery

Central Bank of Armenia: Maintaining uncertainty restrains rapid  economic recovery

ArmInfo. In Armenia, some uncertainty is observed in terms of inflationary expectations, this is especially noticeable on the part of households. Another  uncertainty is the tension on the state border.

There is also a serious uncertainty about the timing of final overcoming the  coronacrisis, it is not yet clear how long the inflationary impact  will last, in particular on commodity markets, and how quickly the  world economy and the domestic economy of Armenia will recover. These  factors restraining the rapid economic recovery were mentioned by the  Chairman of the Central Bank of the Republic of Armenia Martin  Galstyan on August 3 during a press conference, timed to the next  increase in the refinancing rate by 0.5 percentage points - up to 7%.

At the same time, he noted: "Just like our external partners, we  believe that the post-election processes, in other words, a certain  stability, had a positive effect on the Armenian economy. But the  above uncertainties still persist and their impact restrains the  rapid economic recovery.

When asked by ArmInfo regarding the impact of the increase in the  refinancing rate on prices, M. Galstyan explained that this has a  certain effect on prices in the context of one lag, the time period  of which exceeds a six-month period. "That is, today's actions of the  Central Bank (raising the refinancing rate) are aimed, firstly, at  some containment of inflationary expectations, and secondly, we will  see the impact of these steps after two or three quarters. As you  remember, already in December 2020, when inflation was 1.4% , the  Central Bank began to raise the refinancing rate, then already  estimating that in 2021 inflation will exceed the target threshold  (4%), i.e. the increase in the refinancing rate at that time was  aimed at curbing the upward inflationary expectations assumed in  2021.

To another question from ArmInfo about a possible change in the  forecast growth of remittances, M.  Galstyan replied: "The Central  Bank does not exclude an increase in the forecast range of growth in  net inflow of remittances with the next update of forecasts for 2021  (from the currently projected 15-18%). The high growth in the net  inflow of transfers from the USA will continue this year, in parallel  with which the growth in the inflow of remittances from Russia will  recover, the trends of which are already visible at the end of the  first half of this year. And already from 2022, the growth rate of  the inflow of remittances from the United States will begin to slow  down from high to moderate.

Regarding the duration of the state assistance programs, M. Galstyan,  stressing their beneficial effect on the economy, at the same time  suggested that if they continue, the volume will no longer be as  significant as in the covid period, i.e. instead of the previous 160  billion drams, a smaller volume will be used, and naturally the  impact from this will be weaker.  Answering ArmInfo's question about  the likelihood of extending the regulatory "concession" for freezing  a part of the portfolio of non-performing loans for another year, M.  Galstyan said: "We see that there is a sharp slowdown in growth for  certain types of loans. But, having applied this indulgence since  December 2020, the Central Bank at the same time discussed with banks  the possibility of achieving a certain indicator, for which it was  necessary to periodically write off toxic loans from the balance  sheet. This process continues in the current year, which explains the  stagnation of profits and the course of other processes. I will say  that the Central Bank has no disagreements with banks on the issue of  correctly reflecting the real situation in the banking system of  Armenia. I do not think that in the near future the Central Bank will  relax - this is an unlikely scenario. The main goal of this approach  is to return to the pre- covid development indicators. "-l-   


News
IMF sharply improved its forecast for GDP growth in Armenia for 2021 to 6.5%, but warns: IMF sharply improved its forecast for GDP growth in Armenia for 2021 to 6.5%, but warns: "Downside risks remain elevated" 
Economy Minister considers Central Bank`s updated economic forecasts  as pessimisticEconomy Minister considers Central Bank`s updated economic forecasts  as pessimistic
Armenian government to allocate about 357.5 million drams to complete  15 subvention programsArmenian government to allocate about 357.5 million drams to complete  15 subvention programs
Economy Minister on the situation with Iranian trucks: We have a  Economy Minister on the situation with Iranian trucks: We have a  "Plan B"
 Armenian accountants and auditors can grow professionally with help  of British Association of Chartered Certified Accountants Armenian accountants and auditors can grow professionally with help  of British Association of Chartered Certified Accountants
Armenian government approves the ratification of the Agreement of the  CIS countries in the fight against IT crimesArmenian government approves the ratification of the Agreement of the  CIS countries in the fight against IT crimes
Armenia and Singapore exclude double taxationArmenia and Singapore exclude double taxation
Government of Armenia ratified the agreement between the governments  of the Republic of Armenia and the Republic of Malta on the avoidance  of double taxationGovernment of Armenia ratified the agreement between the governments  of the Republic of Armenia and the Republic of Malta on the avoidance  of double taxation
The leadership of SRC of Armenia at a meeting with the head of the  FCS of the Russian Federation noted the special importance of  enhancing contactsThe leadership of SRC of Armenia at a meeting with the head of the  FCS of the Russian Federation noted the special importance of  enhancing contacts
American company Wabtec shows interest in the Armenian market American company Wabtec shows interest in the Armenian market 
Deputy Prime Minister on a possible increase in gas prices: Gazprom  insists that the amount of profit stipulated in the 2013 agreement  does not satisfy themDeputy Prime Minister on a possible increase in gas prices: Gazprom  insists that the amount of profit stipulated in the 2013 agreement  does not satisfy them
Drip irrigation. 5 questions and answers with Converse BankDrip irrigation. 5 questions and answers with Converse Bank
World Bank`s updated Groundswell report warns: Climate change could  force 216 million people to migrate within their own countries by  2050World Bank`s updated Groundswell report warns: Climate change could  force 216 million people to migrate within their own countries by  2050
Expert: The unprecedented rise in gas prices in Europe and EAEU  membership open new opportunities for ArmeniaExpert: The unprecedented rise in gas prices in Europe and EAEU  membership open new opportunities for Armenia
Central Bank of Armenia: In Jan-July 2021, the net inflow of  transfers from individuals increased by 78.5% per annumCentral Bank of Armenia: In Jan-July 2021, the net inflow of  transfers from individuals increased by 78.5% per annum
Efforts are underway to enhance seismic safety at Armenian NPPEfforts are underway to enhance seismic safety at Armenian NPP
EEC Forecast: In 2022, the negative foreign trade balance in the EAEU  will be reduced from $ 5.8 billion to $ 2.5 billion EEC Forecast: In 2022, the negative foreign trade balance in the EAEU  will be reduced from $ 5.8 billion to $ 2.5 billion 
Central Bank of Armenia: Consistent tightening of monetary conditions  has a sufficient impact on the regulation of progressive consumer  demand and on curbing of  inflationCentral Bank of Armenia: Consistent tightening of monetary conditions  has a sufficient impact on the regulation of progressive consumer  demand and on curbing of  inflation
Central Bank upgrades Armenia`s economic growth forecast for 2021 to  5.6%Central Bank upgrades Armenia`s economic growth forecast for 2021 to  5.6%
Central Bank Governor: Inflation in Armenia is more supply-drivenCentral Bank Governor: Inflation in Armenia is more supply-driven
Central Bank: Transfers from USA to Armenia are growing rapidlyCentral Bank: Transfers from USA to Armenia are growing rapidly
Armenia and Ukraine launched the improvement of trade and economic  relationsArmenia and Ukraine launched the improvement of trade and economic  relations
Official and real y-o-y inflation continues to accelerate in ArmeniaOfficial and real y-o-y inflation continues to accelerate in Armenia
Central Bank of Armenia once again raised the refinancing rate - from  7% to 7.25%Central Bank of Armenia once again raised the refinancing rate - from  7% to 7.25%
About 2 billion drams to be allocated for the installation of  photovoltaic stations in seven regions of ArmeniaAbout 2 billion drams to be allocated for the installation of  photovoltaic stations in seven regions of Armenia
"Veolia Djur" proposes to increase water tariff by 43.7 drams
Mher Grigoryan: Trade and economic relations between Armenia and  Ukraine have great potential for developmentMher Grigoryan: Trade and economic relations between Armenia and  Ukraine have great potential for development
"Become a shareholder": ACBA Bank issued its first 500.000 shares  with a total volume of 7.5 billion drams
IDBank as a sponsor of the charity concert IDBank as a sponsor of the charity concert "Armenian Rock for Children with Cancer"
As of September 10, 2021, tax collection exceeded indicators of  pre-crisis 2019 by 4.9% in ArmeniaAs of September 10, 2021, tax collection exceeded indicators of  pre-crisis 2019 by 4.9% in Armenia
The collector coin dedicated to the 30th anniversary of the Republic  of Armenia has been issued by Central BankThe collector coin dedicated to the 30th anniversary of the Republic  of Armenia has been issued by Central Bank
Minister of Finance of Armenia and Ambassador of India discussed  possible directions for development of cooperationMinister of Finance of Armenia and Ambassador of India discussed  possible directions for development of cooperation
 Construction of Construction of "Friendship Bridge" on Armenian-Georgian border is in  full swing
Armenia reduced exports of molybdenum, zinc and copper concentratesArmenia reduced exports of molybdenum, zinc and copper concentrates
Armenia increased export of all alcoholic beverages produced in  countryArmenia increased export of all alcoholic beverages produced in  country
Armenia significantly increased volume of exports and imports of  fruit and berry cropsArmenia significantly increased volume of exports and imports of  fruit and berry crops
Armenia in H1 2021 increased grape exports by 66.7% Armenia in H1 2021 increased grape exports by 66.7% 
Regular meeting of Armenian-German intergovernmental commission took  place in BerlinRegular meeting of Armenian-German intergovernmental commission took  place in Berlin
Exclusive opportunity for VISA Signature cardholders of Converse BankExclusive opportunity for VISA Signature cardholders of Converse Bank
Armenia significantly reduced sugar importsArmenia significantly reduced sugar imports
Imports of oil products to Armenia grew by 3.7% in the first half of  2021Imports of oil products to Armenia grew by 3.7% in the first half of  2021
Armenia continues to reduce imports and exports of passenger carsArmenia continues to reduce imports and exports of passenger cars
Expert: Institutional solutions are needed in the development of  public-private dialogue (PPD)Expert: Institutional solutions are needed in the development of  public-private dialogue (PPD)
Diamond exports from Armenia have increased several-foldDiamond exports from Armenia have increased several-fold
Online processes will replace paperwork and the need to visit customsOnline processes will replace paperwork and the need to visit customs
About 100 thousand residents of 5 regions of Armenia will receive  round-the-clock water supplyAbout 100 thousand residents of 5 regions of Armenia will receive  round-the-clock water supply
Public-private dialogue is not going well in ArmeniaPublic-private dialogue is not going well in Armenia
YOY inflation in Armenia reaches 8.8% in August 2021YOY inflation in Armenia reaches 8.8% in August 2021
Armenia cuts gold exports, increasing importsArmenia cuts gold exports, increasing imports
Exports grow faster than imports in Armenia`s foreign trade with the  EU countries- 41% versus 11%Exports grow faster than imports in Armenia`s foreign trade with the  EU countries- 41% versus 11%
Armenia`s foreign trade turnover with EAEU countries reaches  double-digit growthArmenia`s foreign trade turnover with EAEU countries reaches  double-digit growth
As of the end of August, 488 thousand tourists visited ArmeniaAs of the end of August, 488 thousand tourists visited Armenia
Armenia slightly reduced the export of aluminum foil in H1, 2021Armenia slightly reduced the export of aluminum foil in H1, 2021
"The Power of One Dram" to overcome childhood cancer
A number of Dutch companies are interested in cooperation with  Armenia in IT fieldA number of Dutch companies are interested in cooperation with  Armenia in IT field
One of the successful and long-awaited programs of Ameriabank -One of the successful and long-awaited programs of Ameriabank -"  Generation A 13 "  is launched  
Armenian service sector tries to restore growth ratesArmenian service sector tries to restore growth rates
Nikolay Podguzov: The share of drams in the implementation of  projects on the territory of Armenia will grow Nikolay Podguzov: The share of drams in the implementation of  projects on the territory of Armenia will grow "dramatically"
IDBank prematurely finished the placement of the second tranche of bonds of 2021IDBank prematurely finished the placement of the second tranche of bonds of 2021
Revenue of Armenia`s trade sector increased by 7.5% to $ 3.4 billion  in 7 monthsRevenue of Armenia`s trade sector increased by 7.5% to $ 3.4 billion  in 7 months
Read more


Exchange rates
16.09.2021
RUB6.720.01
USD486.37-0.63
EUR572.46-3.32
GBP672.07-1.26
CAD384.760.39
JPY44.45-0.09
CNY75.610.10
CHF526.43-4.42