ArmInfo.The Central Bank has improved its forecast for 2023 for Armenia's GDP growth from the previous 6.9% to an updated 7.2%. The new forecast is driven by strong growth in the construction and services sectors.
In particular, in the construction sector the forecast was improved from the previous 15.7% to 18.4%, and in the services sector - from 7.8% to 9%. Chairman of the Central Bank of the Republic of Armenia Martin Galstyan announced on September 12 at a press conference regarding the next reduction in the refinancing rate from 10.25% to 9.75%.
At the same time, the Central Bank worsened its 2023 forecast for the industrial sector - from the previous 4.5% to an updated 1.1%, as well as for the agricultural sector - from 1.3% growth to 1.1% decline. "The Central Bank is pursuing a very balanced, wise and correct monetary policy, which gives the desired result. But the work done cannot be considered completely completed, since some risks associated with inflation remain due to rigid prices for a certain group of goods, forming a growth trend," noted the head of the Central Bank.
"In some sectors of the economy, wage growth remains high. GDP growth rates still exceed the potential level. There are still unresolved problems, but at the moment we can state that the decisions that we made much earlier than many countries, providing for tightening monetary conditions are beginning to bear fruit. Of course, the processes taking place in the economy are interconnected with monetary processes, i.e. low demand leads to weak inflation. As you know, after a two-year increase, the Central Bank is reducing the refinancing rate for the third time this year," he added.
M. Galstyan believes that it was then that the prudent policy of the Central Bank allowed us to record such a result as a reduction in the refinancing rate, while many countries are still in the process of raising the key rate. According to him, if a reduction in the refinancing rate, in turn, contributes to the growth of economic activity, then this will also positively characterize the steps of the Central Bank in terms of the correct course of monetary policy.