ArmInfo. Inflationary pressure emanating from international commodity markets is easing at this stage. Chairman of the Central Bank of the Republic of Armenia Martin Galstyan announced this on January 31 during a press conference.
He explained that this was partly due to the exchange rate and partly to the internationally traded FAO index. "For example, vegetable oil prices peaked in February 2022, but now their level is already lower. And naturally, we see a certain decrease in food prices in Armenia," Galstyan noted.
The head of the Central Bank clarified. "The situation related to the situational components at the macro level is as follows: the first component is that world prices for goods are declining, as can be seen from the FAO index; the second is that the central banks of developed countries will continue to tighten monetary policy, and to what extent and how this will be balanced by the recovery of the Chinese economy is still difficult to say; regarding cargo transportation, namely container indices that increased 3-4-fold during the pandemic, I will say that now these problems have definitely been resolved and this will reduce the cost of container transportation from China; and the third component is the behavior of the dram, a significant revaluation of which last year affected on the prices of imported food products. Together, these components allow us to expect an easing of inflationary pressures in 2023."
It should be noted that in December 2022, the official y-o-y inflation in Armenia reached 8.3% (according to statistical data), and the core y-o-y inflation calculated by the Central Bank reached 9.5%, against the y- o-y inflation rates of 7.7% and 7.3%, respectively (official and core ) in December 2021. It would be appropriate to recall that the forecast of the Central Bank, updated at the end of December, projected inflation in the range of 9.5% for 2022 (against the previously projected 8.6%, and actual 7.7% in 2021), with a decrease by 2025 to the target level of 4% . But now the Central Bank expects that the gradual approach to the target level of 4% will begin earlier - from the second half of 2023.
