EADB assesses the drivers of rising inflation in Armenia

The Eurasian Development Bank has assessed the causes of rising inflation in Armenia and the central bank’s decision to hold its refinancing rate. In its weekly macro review, the EDB states that inflation in Armenia accelerated in April on the back of rising food and non-food prices.

“Inflation in Armenia rose to 5.3% year-on-year in April, up from 4.5% year-on-year the previous month. The primary driver was an acceleration in food inflation to 9.5% year-on-year from 7.8% year-on-year. Non-food price growth also picked up to 1.5% year-on-year from 0.8% year-on-year, while services inflation stabilized at 2.6% year-on-year. In these conditions, the Central Bank of Armenia kept its refinancing rate at 6.5% at its May meeting. The decision was also influenced by a potential decline in Armenia’s risk premium, which points to a lower rate trajectory,” the macro review states.