ArmInfo. Chairman of the Central Bank of Armenia, expressed confidence that the regulator's prudent monetary policy will bring the inflation rate back to its target levels in the medium term. He made this statement today at a press-briefing.
Galstyan noted that the current inflation rate is approximately 5.3%, which is above the target level. According to him, this circumstance became a subject of discussion for the CBA Board when setting the refinancing rate, and some members of the central bank's management proposed initiating a gradual increase to curb price growth. However, as Galstyan noted, in the current situation, it's quite difficult to assess the full range of factors driving inflation, specifically, whether they stem from the supply side (cost- push inflation) or represent demand-pull inflation. "If it's supply-side inflation, we need to be more patient; if it's demand-side inflation, we must intervene. And when you look at the structure of inflation, you see that supply-side inflation currently dominates," Galstyan emphasized.
According to him, decisions on the key rate are influenced by a multitude of factors that must be taken into account. These include the economic situation in Russia, the war in the Middle East, rising energy prices, and forecasts for possible development scenarios in the region. The range of factors varies from the forecast for a possible global recession to the level of fiscal expansion aimed at stimulating the country's economy. " "After reviewing the situation, we reached a consensus to temporarily leave the refinancing rate unchanged. However, we intend to revisit this issue. It is also important that the level of inflationary expectations among our households allows us not to worry for the time being," Galstyan said.
It should be noted that on May 5, the Central Bank of Armenia chose to maintain the refinancing rate at 6.5%. In total, from mid-2023 to 2026, the Central Bank of Armenia's key rate was reduced by 4.25 percentage points (from a maximum of 10.75% to 6.5% in December 2025). In the first four months of 2026, it accelerated to 5.3%, driven by rising prices for imported food products and energy resources. Nevertheless, the Consumer Price Index, according to the CBA forecast, is expected to be within the 3.3%- 4.4% in 2026 (against the inflation rate of 3.3% in 2025), with a target level of 3% (+/- 1 percentage point).
