Thursday, May 11 2023 19:09

ArmInfo.Speaking at the presentation of the International Monetary Fund (IMF) report  "Ensuring Macroeconomic Stability in the Caucasus and Central Asia in  the Conditions of Ongoing Uncertainty" in Astana, Deputy Governor at  Central Bank of Armenia Armen Nurbenkyan mentioned three key factors  ensuring the growth of Armenia's economy last year.

, he said,  adding that the increase in GDP due to the activity of non-residents  amounted to approximately 16-18%.  In this vein, he stated that these  funds are managed quite tightly by the country's second-rate banks,  they were not transferred into loans for the productive economy, but  were invested in foreign assets.  , he said, also pointing out the important factor  that people not only moved to Armenia, but also moved their business  here.

And for a clear demonstration of the factor of individuals in the  issue of ensuring economic growth, he cited the following data.  According to Nurbekyan, in 2022 there were 25,000 unregistered  employee in Armenia, and by December of the same year, this figure  had already reached 150,000. He stressed that these are mainly  specialists in the field of information technology, where salaries  are 4 times higher than the average salary in Armenia. He also  pointed to the increasing rates of registered individuals opening a  business in the RA. According to him, according to the assessment of  the Central Bank, the effect of their impact on the economy will be  1-2 points over the next year. "If you look at the other side of the  coin, then demand and inflation are the key points here," the deputy  chairman of the Central Bank said, adding that Armenia had already  passed the peak in terms of inflation.

He recalled that last year inflation in Armenia reached 3.2%, which  is lower than the Central Bank's inflation targeting of 4%. "But, if  we look into the reasons and see what this inflation consists of, we  will see that we also have chaotic inflation in such areas as, for  example, the service sector," said the representative of the Central  Bank of the Republic of Armenia, adding that it is too early to  celebrate the victory , and it is necessary to understand what  constitutes inflation bursts. According to Nurbekyan, if aggregate  demand continues to be as high, then inflation will also grow at a   rather high rate.  Touching upon the refinancing rate, he noted that  the Central Bank of Armenia did not raise or lower it this year,  however, gave a clear message to the market about its readiness to  raise it if necessary. The Deputy Chairman of the Central Bank of the  Republic of Armenia also drew attention to the fact that the CB  raised the countercyclical capital buffer ratio to prevent capital  outflows and economic reversals, as now is the best time to do so.   As another risk in the current realities, Nurbekyan mentioned the  overheating of the real estate market and drew attention to the  increased demand, especially in the secondary market and rising  prices, despite the measures taken by the Central Bank of the  Republic of Armenia.

In conclusion, Nurbekyan noted that the Central Bank of Armenia is  considering various scenarios for the development of the situation in  the future - both inflation and deflation, and based on this, the  Central Bank has left the refinancing rate unchanged for the time  being.

It should be noted that the planned monetary policy (MP) scenario of  the Central Bank of Armenia provides for a rapid decline in y-o-y  inflation, which in the near future will form at a level below the  target threshold, and in the medium term will stabilize near the  target 4%. In this regard, the regulator decided to keep the  refinancing rate at 10.75%. The refinancing rate was raised to 10.75%  by the Central Bank on December 13, 2022, which was found to be a new  all-time high after 10.5% in 2015. The previous five ones were in  2022 in February from 7.75% to 8%, in March to 9.25%, in August to  9.5%, in September to 10% and in November to 10.5%. And from 2021 to  December 13, 2022 inclusive, there were twelve increases in the  refinancing rate - in total from 5.25% to 10.75%. In previous years,  the historical maximum of the refinancing rate was fixed in 2015 -  10.5% (according to the February decision of the Central Bank), with  a repetition of this level in 2022 (according to the November  decision of the Central Bank).  In March 2023, the official y-o-y  inflation in the consumer market of Armenia decreased to 5.4% from  the y-o-y l inflation rate of 7.4% in March 2022. The corey-o-y  inflation calculated by the Central Bank also decreased to 6.4% in  March 2023 from y-o-y  7% in March 2022.