CENTRAL BANK: YEAR-ON-YEAR INFLATION IN ARMENIA MAY REACH 7 OR 8% IN APRIL AND MAY

ARKA
March 11, 2010

YEREVAN, March 11. /ARKA/. Year-on-year inflation in Armenia may reach
seven or even eight percent in April and May, Arthur Stepanyan, chief
of Armenian Central Bank’s monetary policy division, said on Thursday.

The central bank thinks that the planned gas price raise on April 1
will drive inflation 0.9 to 1 percentage point up – two times lower
than expected a year earlier.

Stepanyan told journalists that in April and May inflation will be
lower, compared with the present rate.

He said that the central bank tightened its monetary policy this year
to make inflation closer to the planned rate.

According to National Statistical Service of Armenia, the country
recorded 0.3% inflation in February, compared with January.

As a result, year-on-year inflation reached 9.4% in February, compared
with January, after rising 2.4 percentage points, compared with the
previous month.

Stepanyan said that nobody knows how to remedy the situation at once
and prevent price rise.

"But we think that even if targeted result is not reached later this
year, it will be reached in the first quarter of 2011," he said.

In its monetary policy program, the Central Bank of Armenia predicted
7.4% annual inflation for 2010.