ArmInfo. Despite the fact that annual inflation in Armenia reached 8.8% in August 2021, and the growth continues, the Central Bank expects inflation to return to the target value of 4%. This was stated by the Deputy Chairman of the Central Bank of the Republic of Armenia Nerses Yeritsyan on September 27 at a meeting of the Standing Committee on Financial-Credit and Budgetary Issues on the Execution of the State Budget for the first half of 2021.
"After eliminating the base effect and taking into account the monetary policy pursued since December 2020, inflation will return to the target framework at 4%," the document reads. According to him, the work carried out in this direction by the Financial Regulator over the past 7-8 months should already give the expected result.
Earlier, ArmInfo reported that on September 14, at a meeting of the Council of the Central Bank of Armenia, the refinancing rate was once again increased - from 7% to 7.25%. In this regard, rates on lombard repo and on deposits attracted from banks were also increased by 0.25% percentage points - to 8.75% and 5.75%, respectively. To note, in 2021 this is the fifth increase in the refinancing rate. For the first time, the Central Bank raised the refinancing rate on February 2 - from 5.25% up to 5.5%. Accordingly, by 0.25 percentage points were raised rates on lombard repo - from 6.75% to 7%, and on attracted deposits from banks to deposits - from 3.75% to 4%. The second increase in the refinancing rate followed on May 4 - by 0.5 percentage points to 6%, in accordance with which the rates on lombard repo were also increased - to 7.5%, and on deposits attracted from banks - to 4.5%. The third increase in the refinancing rate followed on June 15 - up to 6.5%, in accordance with which the rates on lombard repo were also increased - up to 8%, and on deposits attracted from banks - up to 5%. And the fourth increase in the refinancing rate took place on August 3 - by 0.5 percentage points to 7%, in accordance with which the rates on lombard repo were also increased - to 8.5%, and on deposits attracted from banks - to 5.5% . Prior to that, in 2020, the Central Bank revised the refinancing rate four times downward and once upward. In particular, after the reduction of the refinancing rate from 5.5% to 4.25% (March, April, June, September), an increase to 5.25% took place in December. And the corresponding change was undergone by the rates on lombard repo and on deposits attracted from banks - up to December 6.75% and 3.75%.
Meanwhile, according to statistics, in August of this year official annual inflation in the consumer market of Armenia reached 8.8% (data of the RA Statistical Committee), while real inflation increased to 8% (data of the Central Bank of Armenia), against 1.8% and 1.1% per annum, respectively, in the same month of 2020. So, in August 2021 to August 2020, consumer prices increased by 8.8% (against an increase of 1.8% a year earlier) due to an increase in the price of food products by 14.5% and non-food products by 9.4%, with an increase in tariffs for services by 1.8%. In August 2020 alone, inflation was recorded at 0.4% (against 0.1% deflation in August 2020) due to the rise in prices for food products by 0.5% and non-food products by 0.4%, while tariffs for services increased by 0.1%. In Yerevan, consumer prices increased by 0.4% in August 2021, against a decline of 0.1% a year earlier.
The increase in consumer prices by 0.4% was accompanied by a 0.2% devaluation of the dram against the dollar, and in January-August against the background of inflation of 3.7%, there was a revaluation of the dram against the dollar by 5.2% (against deflation of 1.2% and devaluation of the dram by 1.5% a year earlier). The estimated exchange rate of the dram to the dollar in August 2021 averaged 491.7 AMD / USD 1, exceeding the level of a year ago by 1.3% (485.5 AMD / USD 1). Economic growth in the state budget for 2021 is foreseen at 3.2%, while inflation is set at 4% (+/- 1.5%).