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Relatively high 4.7% economic activity index recorded in Armenia in Jan-Feb 2016

YEREVAN, April 11. /ARKA/. Armenia recorded a relatively high 4.7% economic activity index in Jan-Feb 2016, the board of the Central Bank of Armenia placed it on record at its session on March 29.

According to the central bank’s press office, this increase was mainly due to high growth in industry and services – 9.9% and 9.8% respectively.

A stimulative taxation and budgeting policy was pursued at the first quarter 2016, which impacted the expansion of aggregate demand.

Domestic private demand remained weak creating environment for continuation of decline in private consumption and investments as the increase in domestic supply was swallowed by the increase of the outside demand in the beginning of this year.

“The outside demand speedup, compared with the domestic demand, formed a relatively high gross demand,» the press release says.

According to the report, a 1.4% deflation was recorded in February. The deflation was mainly due to decrease in prices for foods.

The low inflation rate was mostly resulted from deflation impacts that came from international foods and raw materials markets, and this continues contributing to preservation of incomes’ value and reduction of organizations’ expenses. It is also driving inflation outlooks down.

Taking into account the mentioned, the central bank thinks that a precipitous weakening of monetary conditions in the end of 2015 is enough to neutralize deflation pressures throughout the entire year.

Therefore, the regulator finds it reasonable to keep easing monetary conditions, and, as a result, inflation environment will gradually be expanding and 12-month inflation will come close to the projected rate. —0—

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