ArmInfo. Inflation will form in the range of 9-9.5% by the end of 2022 (against the previously forecasted 8.6% and actual 7.7% in 2021). Such a forecast was presented on December 13 by Chairman of the Central Bank of the Republic of Armenia (CBA) Martin Galstyan during a press conference on the next increase in the refinancing rate to 10.75%. He noted that (in December) there will be some acceleration of inflation in the current month, but the pace will be slower than previously expected.
At the same time, the head of the Central Bank said that in the short term, 12-month inflation will gradually decrease, and in the medium term, more precisely in the second half of 2023, it will stabilize near the target threshold of 4% (it is noteworthy that the early forecasted an approach to the target 4% in 2025, ed. note). He noted that as a result of the contractionary monetary policy, the observed revaluation of the dram, and factors emanating from the external sector, the growth in prices of imported food products is seriously slowing down.
The latter contributes to the mitigation of the inflationary environment. However, continued high demand and expectations of high inflation continue to strongly influence the behavior of inflation. Therefore, the Central Bank considered it appropriate to raise the refinancing rate this time as well in order to ensure price stability and neutralize any risk of anchoring inflationary expectations.
During the press conference, M. Galstyan also presented the forecast GDP growth updated for 2022, which remained at the level of 12.9%, but at the same time, the growth rates by industry were revised. In particular, the forecast for the growth of the construction sector has been improved - up to 20.1% (from the previous 14.1%) and the industrial sector - up to 5.5% (from the previous 3.2%), but at the same time, the expected growth in the services - up to 18.8% (from the previous 19.4%), and in agriculture, instead of the previously expected growth of 3.2%, a decline of 0.7% is now expected.
According to statistics, in October 2022, the official y-o-y inflation in the consumer market of Armenia reached 9.5%, against respectively inflationary y-o-y inflation of 9.1% in October 2021. And the main annual inflation calculated by the Central Bank in October 2022 reached 10.5%t, compared to 7.9% in October 2021. In November 2022, official y-o-y inflation, according to statistical data, amounted to 8.8% (against 9.6% in November 2021), and the November data of the Central Bank on core y-o-y inflation has not yet been published.
