YEREVAN, April 30. / ARKA /. Armenia’s Central Bank decided today to leave the refinancing rate at 5.75%, saying also that the inflation in March 2019 was 0.1%, as much as in March 2018. As a result, the 12-month inflation rate remained unchanged at 1.9%. The natural inflation in March 2019 was 0.2%. The 12-month natural inflation was 1.3%, it said.
According to the regulator, the slow growth of the global economy is in line with the Central Bank’s forecasts, manifested also in a weakening of global demand and the persistence of the low inflationary environment in the international markets of major commodities.
According to the Central Bank, the economic activity in January-March this year was higher than expected, amounting to 6.5%, driven largely by growing private consumption.
The Central Bank said also the fiscal policy in the first 4 months of 2019 had a more restrictive than expected effect on domestic demand because of a deficit that was significantly lower than expected.
However, it is assumed that by the end of the year, the fiscal policy will have largely a neutral impact on inflation, since it is expected that the restraining effect on domestic demand in the second half of the year will be offset.
This in view, the Central Bank decided to maintain the stimulating level of monetary conditions, leaving the refinancing rate unchanged.
In the context of projected macroeconomic developments, there will be a need to maintain long-term stimulating conditions to achieve the mid-term inflation target. As a result, it is expected that inflation in the coming months will remain below the target indicator, further stabilizing around it.
On January 29, 2019, the Central Bank of Armenia, for the first time in almost two years, lowered the refinancing rate by 0.25 percentage points to 5.75%. -0-
