At May 18 sitting of the RA NA Financial-Credit and Budgetary Affairs, the Governor of the Central Bank (CB) Martin Galstyan presented the annual report on the CB activity.

“The financial year 2020 was a rather hard year in the world and especially for Armenia, with the economic and social challenges stemming from it. After the dissemination of the pandemic in terms of the health care and economic further developments the world was in uncertainty, which also supposed the regular review of the CB programme forecasts. Abrupt fall of economic activeness was observed,” Martin Galstyan. In such situation during the year the Government carried out tax-budgetary policy directed to the social and economic assistance.

During the first quarter of the year, taking into consideration the inflation developments under the keeping weak gross demand, the CB pursued stimulating monetary policy and gradually increased the amount of stimulation, reducing the main re-financing percentage rate in total 1.25 %. As the CB Governor has presented, in terms of the perspective of the economic restoration at the end of the year and the inflation developments the martial law declared in the RA on September 27 caused additional uncertainty and in parallel to that the outburst of the pandemic new wave and its dissemination in rapid rates. In the conditions of the economic-political uncertainty. Risk growth was recorded in the RA financial markets, and certain depreciation of the AMD. Continuing to remain faithful the policy of the floating currency, the CB had participation in the small amount of the situation in the currency market for ensuring regular activity in the financial market. According to the monetary policy programme of the first quarter of 2021, low economic activeness and weak environment of the demand is still maintained in the RA.

It was noted that in 2021 slow restoration of the gross demand will be. Positive developments have been more visible in the industry and service branches, the monetary transfers from abroad and more positive developments of the economic loan mainly promote the restoration of the inner demand in more rapid rates than it was expected. Beginning from the end of the year, inflation essential acceleration has been recorded in the RA, which is mainly conditioned by one-time factors of the demand transferring from the international goods-raw markets and the AMD depreciation. Thus, according to the speaker, it is of short-term character and beginning from the end of the year, approaching 4% index. Despite the certain increase of the inflation and the inflation expectations, the as a result of the CB adequate actions, the situation is assessed in the area of governance and mainly anchored. It has been noted that the uncertainties on the route towards the inflation future have been increased in the society, so and the CB will consistent in the neutralization of any risk of the development of the inflation expectations.