YEREVAN, December 18. /ARKA/. Inflation is expected to remain below the Central Bank of Armenia’s target in the short term and gradually approach the target in the medium term, according to the IMF report.
As noted by IMF Deputy Managing Director and Acting Chairman Bo Li, the stance of monetary policy is appropriate, and future decisions on the policy rate should continue to be guided by the inflation outlook and inflation expectations, given the uncertain prospects.
“The growing credibility of the Central Bank of Armenia since the adoption of inflation targeting in 2006, the strengthening of its operational independence, and the modernization of the monetary policy framework provide an opportunity to lower the inflation target within a well-coordinated and clearly communicated strategy. The flexible exchange rate has served Armenia well, absorbing external shocks while building reserve buffers,” he said.
In the state budget of Armenia for 2024, inflation is projected at 4% (±1.5%), and for 2025, it is set at 3% (+1%). In November, the 12-month inflation rate was 1.4%. According to the Central Bank’s monetary policy report for the fourth quarter of this year, inflation in Armenia is expected to range from 2.1% to 1.6% by the end of 2024. The forecast for 2025 is 3.9% to 3.2%, for 2026 – 4.2% to 3.8%, and for 2027 – 4%.
The World Bank expects inflation in Armenia to be 3% in 2024, 3.5% in 2025, and 4% in 2026. The IMF predicts that prices in Armenia will rise by 3.1% in 2024 and by 3.7% in 2025. According to ADB forecasts, inflation in Armenia will be 0.8% in 2024 and will accelerate to 2.5% in 2025. The EDB expects inflation in Armenia to be 1.8% by the end of this year and 3.1% by the end of 2025.
