By the end of 2018, inflation in Armenia is expected to be below the forecast
According to the results of 2018, inflation is expected to be below the forecast. Such a forecast was voiced by Arthur Stepanyan, a member of the Board of the Central Bank of Armenia, at a press conference on December 18. He noted that inflation in November was 1.8%, and by the end of 2018, this figure is expected to be in the range of 1.5-1.8%.
"The low inflationary level, which has been preserved for several years and in recent months, allows for an expanded monetary policy, which is also reflected in trends in lower interest rates and an increase in lending volumes," he said.
Summarizing what has been said, the representative of the Central Bank noted that the low inflationary environment that has been formed in recent years is very important for the economy. "First, it is important from the point of view of ensuring the purchasing power of the population, since our country cannot yet provide an inclusive model of economic growth. Secondly, it is important from the point of view of the formation of low-interest rates in all segments of the financial market, which allows broad monetary policy ", he explained.
According to Stepanyan, the recent political events in the country, to a certain extent, obliged the regulator to be more cautious and conservative in their forecasts and activities in order to realize the goals set for 2018-2019. In this vein, a member of the Central Bank Board noted the factors that influenced the activities and forecasts of the Central Bank. First of all, he drew attention to trends in increasing market competition, incl. enterprises with dominant market positions. Speaking about the latest trends, A. Stepanyan noted that they are taking a more conservative approach in their pricing policies.
At the same time, he stressed that the increase in prices in international markets affects the prices of the domestic market in the long term, and not immediately, as was observed earlier. In this context, he referred in particular to the fuel market. "Secondly, the new government focuses on the effectiveness of government spending, especially in terms of government procurement and capital construction, trying to reduce and eliminate the corruption risks that occurred before," he said. Noting this as a very positive factor, A. Stepanyan noted that on the other hand, it reduces the rate of state funds involved in the economy. In this regard, he added: "According to the results of the current year, when the Ministry of Finance summarizes the budget figures, we will see that a significant amount of savings will be recorded from government spending, and the budget deficit to GDP, according to preliminary estimates, will be about 1.3%, against observed over the years 2%>.
As another important factor, A. Stepanyan named agricultural indicators, which also affected the forecasts and activities of the regulator. In particular, appealing to the Statistical Committee, he noted that since the second half of this year, there was a decline in the agricultural sector, in particular, according to the results of November - by 20%. "The sharp decline in the supply of agricultural products should have affected the price background. However, as we see, the price range of agricultural products, in particular, the one that occupies the lion's share of the market remained at the same level as a year earlier. This indicates a flaw in the statistical calculations", he said.