Inflation in Armenia to stay near zero throughout Q3 – EDB

YEREVAN, August 7. /ARKA/. The Eurasian Development Bank (EDB) expects inflation in Armenia to stay near zero for the whole of Q3, 2023.

It said the forecast is backed by the strengthening national currency, the dram, lessening of external price pressure and tight monetary conditions.

'Against this background, the Central Bank of Armenia decided to cut last week the refinancing rate by 0.25 p.p. for the second time in a row - to 10.25%," the EDB weekly review says.

The review recalls that in Armenia prices decreased by 0.1% y/y in July after decreasing by 0.5% a month earlier.

"The drop was facilitated by the weakening of inflation in the food segment (minus 3.9% yoy in July after minus 5.1% a month earlier) due to cheaper imported products. Prices for imported fuel also decreased (minus 7.2% y/y), the growth of prices for other non-food goods and services slowed down," according to the review.

Armenian government's growth projection for 2023 is 7%; the inflation is expected to be 4% (±1.5%).

Armenia's economic activity grew by 11.4% in the first half of 2023 compared to January-June 2022, according to the National Statistical Committee.

The Central Bank's expects the economy to grow by 6.9% this year, while the 12-month inflation is forecasted to be slightly below the 4% target. -0-