YEREVAN, September 14. /ARKA/. In an attempt to curb the growing inflation Armenian Central Bank has raised today the refinancing rate by 0.25 percentage points, setting it at 7.25%. The inflation still remains well above the 4 percent target set by the government and the Central Bank for 2021.
Speaking at a news conference today Central Bank chairman Martin Galstyan said in August 2021, inflation was 0.4% up from the previous month. As a result the 12-month inflation amounted to 8.8% at the end of the month.
According to him, the short-term inflation acceleration in recent months has been driven by the rise in seasonal food prices, while natural inflation turned out to be lower than expected.
“On the other hand, both external and internal economies are still experiencing inflationary effects, therefore the Central Bank decided to raise the key rate,” Galstyan said.
Galstyan also noted that the recent tightening of monetary conditions has had a significant impact on the regulation of forward-looking demand, containment of inflation and the achievement of its targets in the medium term.
“In such conditions, it is predicted that 12-month inflation will remain high until the end of the year, and then in 2022 it will approach the target of 4% and stabilize around it,” Galstyan said.
According to the National Statistical Committee (NSC), Armenia’s consumer price index in late August 2021 was 8.8% higher from the same month in 2020. It said also that the inflation in August 2021 was up 0.4% from the previous month.
The consumer price index of the first eight months was higher 6.4% from the same time span in 2020, according to the NSC.
Armenian government’s projection of GDP growth for 2021 is 3.2%, while inflation is set at 4% (± 1.5%). According to preliminary statistics, in the second quarter of 2021 Armenian economy expanded by 13.1% compared to the same period in 2020.
In early July, Prime Minister Nikol Pashinyan stated that the forecast for economic growth for 2021 has been revised upward to 6%. -0-
