Central Bank forecast: Armenia to complete 2022 with an inflation rate of 10%

ArmInfo. Armenia will  complete 2022 with an inflation rate of 10%. Chairman of the Central  Bank of Armenia Martin Galstyan voiced a similar forecast during a  press conference on November 1. "We expect that inflation will be at  the level of 10% at the end of the year, even taking into account the  use of restraining mechanisms," he stressed.  At the same time, the  head of the Central Bank indicated that without the use of these  mechanisms, the inflation rate in the country would have reached 15%.

According to Galstyan before the Russian-Ukrainian conflict (until  February 24), inflation in Armenia was registered at the level of 6%,  which is close to the target indicator (4%+/-). He noted that that,  according to forecasts, it will be possible to achieve the target, in  the third quarter of 2023.

At the same time, the chairman of the Central Bank noted that next  year the Regulator expects that prices will decrease on the world  commodity market. "Naturally, it is very difficult to forecast  processes outside the economic point of view. For example, the other  day the Russian Federation issued a statement that it was withdrawing  from the agreement on the supply of grain through the Black Sea  (Grain deal between Russia, Ukraine, Turkey and the UN - ed. note).  At the same time, if we look at the trends, we see that there should  be softer scenarios in the commodity markets, as economic growth   rates are declining in the world. We expect lower economic growth in  the US, Eurozone countries, China," he said. In this regard, he  referred to the updated IMF forecast, according to which global  economic growth will be 2.7% instead of the previously expected 3.6%,  China's economic growth will be close to 3%, and the US is debating  whether there will be a recession. "These are all demand-holding  factors that can and should lead to lower prices for goods, if we  consider it from an economic point of view.  Now the question is how  it will be broadcast to local prices in Armenia", Galstyan noted.

In this context, he stressed that the Central Bank expects economic  entities to adjust prices down to a certain extent. According to  Galstyan, the main obstacle in this process may be the impressive  demand, which is driven by international visitors. <The economy is  overheated, there are queues in stores, prices for goods and services  are rising. On the one hand, we believe that positive trends will be  driven by supply, but the question is how long the demand will last  and with what force. And our actions are aimed at curbing this demand  and overheating>, he said.

According to the RA Statistical Committee, in January-September,  inflation of 8.6% was recorded in the consumer market of Armenia  (against inflation of 6.7% a year ago), which was facilitated by a  rise in prices for food products by 13%, non-food products - by 6.8%.  %, and an increase in tariffs for services by 4.5%, against growth of  9.8%, 8.5% and 1.9%, respectively, a year earlier. The average  monthly price increase in the consumer market amounted to 0.6% in  January-September 2022, against 0.4% growth a year earlier.  In  September 2022, by September 2021, consumer prices increased by 9.9%  (against an increase of 8.9% a year earlier) due to an increase in  the price of food products by 13.1% and non-food products by 8.1%,  with an increase in tariffs for services by 7 .5%, while a year  earlier (in September 2021 to September 2020) the increase in prices  for food and non-food products was higher - 14.7% and 9.9%,  respectively, and the increase in tariffs for services was meager -  1.6%.