4 (±1.5%) INFLATION FORECAST IN ARMENIA FOR NEXT 12 MONTHS
ARKA News Agency, Armenia
Nov 7 2006
YEREVAN, November 6. /ARKA/. Despite inflationary pressures,
inflation is expected to range within the planned 4±1.5% during the
next 12 months.
The Central Bank of Armenia (CBA) reports that external inflationary
pressure is maintained despite certain reduction and stabilization
of the world prices for oil products in August 2006. The expected
decrease in the crop yield in Russia and in Ukraine may cause risks.
The CBA Board members pointed out that the economic growth in Armenia
is mainly recorded due to the construction and service sectors. As
a result, the increase in the population’s cash incomes, accompanied
by increase in private transfers, creates inflationary pressures.
Inflationary pressure caused by the agricultural sector is maintained
as well.
In conditions of dramallization (replacement of the USD by the AMD),
the CBA’s policy of satisfying the demand for Armenian drams through
the purchase of foreign-exchange, accompanied by huge on-budget
expenditures, will cause excess liquidity in economy. The CBA Board
members believe that this liquidity is possible to neutralize in
conditions of the current interest rates.
In case the inflationary pressures increase, the CBA will gradually
neutralize their effect during 12 months.
The RA Statistical Service reports that 2.5% inflation was recorded
in Armenia in October 2006 compared to December 2005. The consumer
price index was 106% in October 2006 compared to October 2005.
–Boundary_(ID_tVsv9uXcFJtakKc9Pzc3XA)–
From: Emil Lazarian | Ararat NewsPress
