2024-08-08 04:40:39
According to the announcement of the Central Bank, in 2024 at the January 30 meeting, the Central Bank Board decided to lower the refinancing rate by 0.5 percentage points, setting it at 8.75%.
The message also states:
“In 2023 In December, the 12-month inflation decreased, reaching -0.6% at the end of the month. 12-month normal inflation also decreased, making -0.4%.
In the fourth quarter of 2023, the economic activity of the main partner countries of the world and the Republic of Armenia continued to slow down. The inflationary environment in international commodity markets is easing and global inflation is slowing somewhat. However, positive labor market developments in partner countries continue to support demand expansion. At the beginning of 2024, due to the aggravation of geopolitical developments in the Middle East, a certain increase in the prices of energy carriers was recorded and risks of disruption of supply value chains were formed. In such a situation, the central banks of the leading countries will gradually loosen restrictive monetary conditions in the near future. As a result, weak deflationary effects on the RA economy are expected from the external sector.
In the fourth quarter, high economic activity was maintained in the Republic of Armenia, which continued to be supported by the high growth of the construction and service industries. External demand has somewhat slowed down due to a decrease in the growth rate of tourism. At the same time, domestic demand remains high, mainly reflected by high growth in private consumption. A low inflation environment is maintained in the conditions of weak deflationary effects from the external sector and the restrictive monetary policy implemented in previous years. The latter continues to be expressed also by a certain decrease in the growth rate of wages and inflationary expectations in the labor market.
In the current situation, the Board of Central Bank considers it appropriate to reduce the policy interest rate. The Council will be consistent with adequate actions to ensure demand adjustment and stabilization of inflation expectations. In the envisaged monetary policy scenario, the 12-month inflation will remain below the target level in the near future, then gradually increase and stabilize around the target 4% in the medium term.
The Board of the Central Bank estimates that the risks of deviation of inflation from the planned trajectory are mostly balanced. In case of any risk manifestation, the Council will respond adequately and ensure price stability.”