SUPPORT OF ECONOMIC GROWTH AND LOW INFLATION WILL NOT BE MUTUALLY HINDERING: CENTRAL BANK OF ARMENIA

ArmInfo
11.03.2010

ArmInfo. In late Apr and May inflation in Armenia may reach 7-8%,
Head of the Monetary-Credit Policy Department of the Central Bank of
Armenia Artur Stepanyan said during a seminar today.

This figure includes the Apr 1 rise in the gas price, which is expected
to have a 0.9%-1% influence on inflation, i.e. half of what the CB
forecasted last year in the face of scheduled rise in electricity
and gas tariffs.

The CB’s monetary-credit policy is aimed at bringing inflation to
the target level. Nobody has a magic wand to be able to influence the
current prices but even if at the end of this year target inflation
turns out to be different in Q1 2011 it will reach the planned level.

According to the CB’s monetary-credit policy, in 2010 inflation will
be 7.4%. However, if the CB interferes inflation may drop to 6%-7%.

Changes in the global economy may bring this level down but this is
not what the CB will try to get at any price.

After the crisis of 2009 the Armenian economy is recovering and
it would be wrong on the CB’s part to take drastic steps to ensure
planned inflation as this may curb economic growth. Last year the
CB was reasonable and will act the same way this year too. If the CB
continues its well-balanced efforts to curb inflation and to foster
economic growth it will be able to stabilize the economy as stable
prices are a guarantee of stable economic growth.

To remind, Apr 1 the natural gas tariff will be raised by 37.5% to
132,000 AMD per 1,000 c m for the population and 13% to $243.13 per
1,000 c m for the industry.

In Feb 2010 inflation in Armenia was 0.3%, in Jan-Feb 2010 – 2%. In
2009 it was 6.5%. In Jan 2010 as compared with Jan 2009 GDP grew by
2.4%, as compared with Dec 2009 it decreased by 60.5% to 149.5bln
AMD or $396mln in market prices.

From: Emil Lazarian | Ararat NewsPress