Central Bank of forecasts inflation to approach target threshold by  end of 2022

ArmInfo. The Central Bank of Armenia forecast inflation to approach the target threshold (4%, +/-1.5) by the end of 2022. Chairman of the Central Bank of Armenia  Martin Galstyan said this during the press conference on raising the  refinancing rate on February 1, forecasting 5-5.5% inflation for  2022.

The head of the Central Bank, referring to the baseline scenario,  stressed that in 2022 inflation in the food market will not repeat  the trend of 2021: "There will be an increase in prices, but the pace  will slow down."

M. Galstyan indicated that, given the increase since February this  year, tariffs for electricity and water, as well as certain impact of  spillovers associated with uncertainty about changes in gas tariffs,  according to the analysis of the assumed scenario, the change in  regulated prices will have an upward impact on headline inflation by  1-1.5 percentage points.

At the same time, he positively assessed the work of the Central Bank  in 2021: "Estimates show that without the implemented measures of the  Regulator, in general, inflation in the country would have reached  15%, and food prices would have risen above 22%." 

According to statistics, in December 2021, official y-o-y inflation  in the consumer market of Armenia amounted to 1.6%, and y-o-y  inflation (December 2021 to December 2020) reached 7.7%, against  respectively inflationary 3.4% in December and 3.7% per annum in  2020. And the core inflation calculated by the Central Bank for  December 2021 was 0.6%, and y-o-y 7.3% (December 2021 to December  2020), against respectively inflationary 1.7% for December and 3.6%  per annum in 2020. Meanwhile, the forecast of the Central Bank,  updated at the end of December, forecasted higher inflation of 8.4%  for 2021, with a further decline in 2022 to 5.5%.