ArmInfo.RA Minister of Finance Tigran Khachatryan believes that, given lower inflation rates in 2021, the refinancing rate will step by step be reduced beginning 2023, which, in turn, will enable the 7% GDP growth target to be reached.
On February 2, the Central Bank of Armenia (CBA) raised the refinancing rate by 0.25%, up to 8%. Since 2021, the refinancing rate has been raised seven times - from 5.5% up to 8%.
According to the official data, the annual inflation reached 7.7% last December against December 2020.
The CBA expects the inflation to go down to the targeted 4% +/-1.5 by the end of 2022. Raising the key rate is expected to control inflation in economy, Mr Khachatryan said. On the other hand, it restricts economic grows due to its direct impact on lending rates.
Last year saw 5.8% growth in economic activity in Armenia after a 7.5% decline in 2020 and 7.8% growth in 2019. Last year, 3.2% GDP growth was budgeted. Armenia's government plans to ensure 7% GDP growth in 2021-2026, and even 9% growth in case of favorable conditions.
