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Inflation in Armenia to be close to ceiling of projected range – 2.5-5.5% in 2015

YEREVAN, June 29. /ARKA/. In the context of limited influence of monetary influence and the lowering prices for energy resources, the annual inflation in Armenia will fluctuate close to the ceiling of the projected range – 2.5-5.5% in 2015, the analysis division of the Eurasian Development Bank says in its CIS Macromonitoring.

“Some lowering of inflation outlooks in economy (5.1% in May 2015) shows likely exhaustion of an inflation effect of devaluation,” the report says.

According to the report, inflation speeded up to 5.8% by late March 2015, which was due to devaluation in late 2014 and a low base.

The slipping prices for energy resources and a tough monetary policy as well as reduction in money stock in drams and a weak domestic demand are hobbling the inflation.
Increase in interest rates and norms of obligatory reservation in foreign currencies in the financial sector came as consequence of the toughened monetary policy, and this slowed down banks’ lending to a 14.2% annual indicator.

As a result, profitability fell (ROA and ROE 0.2% and 1.7% respectively) amid the growing non-performing loans (8.3% in the 1st quarter 2015).

The Eurasian Development Bank says economic growth in Armenia will slow down to 0.8% in 2015.
In the government budget for 2015, GDP is projected at 4.1% and inflation at 4% (±1.5%). —–0—-

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