ArmInfo. In Armenia, a significant increase in exports and financial inflows also contribute to the revaluation of the dram in the foreign exchange market, and the latter, according to the Central Bank, will have a positive impact on the weakening of the domestic inflationary environment in the near future. Head of the Central Bank of the Republic of Armenia Martin Galstyan announced this on June 14 during a press conference.
He noted that in Q2 2022 high activity is maintained in the Armenian economy. A significant flow of foreign visitors and an increase in domestic private spending contribute to the growth of the service sector and gross demand. This leads to an expansion of the general inflationary environment and increases inflationary expectations. " We considered it expedient to leave the refinancing rate unchanged and this time - at the level of 9.25%, because in the current situation, when a serious demand has formed in the Armenian economy from international visitors, the Armenian dram is revaluing, which in turn should, to a certain extent, adjust the prices of imported goods.
In this context, maintaining the key rate at the same level will allow not only assessing the degree of stability and sustainability, but also tracking the movement of imported goods in the near future.
It's no secret that in the summer months a seasonal factor affects the background of the harvest, the size of which determines what manifestations are possible on the market - inflationary or deflationary. The Central Bank forecasts that inflation will increase in the coming months, but it is difficult to predict how much, since the degree of uncertainty changes every month," M. Galstyan emphasized, while predicting that by the end of 2022 the inflation rate will be above 8%.
He said that in May 2022, official annual inflation reached 9%, and mainy-o-y inflation was 8.4% (against y-o-y inflation rates of 5.9% (official) and 7.4% (main) in May 2021, respectively - ed. note). ).
Russian-Ukrainian conflict continues to have a negative impact on the development of the economy and financial markets in the main partner countries of Armenia. The ongoing disruption of global value chains and rising prices in international commodity markets are leading to an expansion of the global inflationary environment. Central banks in developed countries are announcing a more accelerated tightening of monetary policy. Thus, according to M. Galstyan, the inflationary impact from the external sector on the Armenian economy is still preserved. The Central Bank intends to continue consistently taking appropriate actions to stabilize inflation and neutralize any risk of anchoring inflationary expectations. According to the forecast of the Central Bank, y- o-y inflation rates will gradually decrease, approaching the target threshold of 4% in the medium term.
According to the Board of the Central Bank of the Republic of Armenia, there is still a high uncertainty of macroeconomic prospects due to geopolitical developments. At the same time, the risks of inflation deviating from the forecated vector are mostly balanced. In case of manifestation of risks of any direction, the Board of the Central Bank will take appropriate measures to ensure price stability.
