Armenian government will not contain inflation to detriment of economic growth

YEREVAN, March 21. /ARKA/. The Armenian government will implement its fiscal policy as projected by the 2022 budget and will not resort to special measures to restrain the prices, Finance Minister Tigran Khachatryan said today to an emergency meeting of the parliamentary committee on fiscal policy.

"We believe that we should not resort to additional measures that could harm economic growth," he explained.

“How could the government implement its fiscal policy to curb inflation? There are two choices: either we contain the situation, including economic growth factors, or we carry out all the planned expenses, while the Central Bank, as part of its quarterly policy, contains inflation through the interest rate,” he said.

The government’s growth projection for 2022 is 7%, and the inflation is set at 4% (± 1.5%). Armenia’s Central Bank revised last week downward its 2022 GDP growth forecast from 5.3% to 1.6%.

“The impact of sanctions slapped on Russia by the West will significantly slow down Armenia’s economic growth due to a drop in industrial output,” Central Bank chairman Martin Galstyan said at a press conference.

Fitch Ratings said last Friday that the headwinds associated with the Ukraine conflict and sanctions on Russia have caused it to revise down its growth projection for Armenia for 2022 sharply to 1.3% (previously 5.3%). -0-