In an interview with Public Television of Armenia, Armen Nurbekyan, Deputy Governor of the Central Bank of Armenia (CBA), projected a slowdown in economic growth for 2024. He mentioned an expected economic growth rate of around 6 percent for the upcoming year.

“However, 6 percent is a very high economic growth if we consider that in 2022, we [i.e., Armenia] had 12.6 percent economic growth, and in 2023 we will have about 8 percent. The 6 percent economic growth on such a high base is an even more impressive number,” he added.

Armen Nurbekyan also outlined the inflation outlook for Armenia. He stated that they anticipate a gradual return of inflation to its target, forecasting around 3.1 percent inflation by the end of 2024. Furthermore, he mentioned that in 2025, they expect to be close to the 4 percent target.

Nurbekyan explained two main scenarios. The first scenario involves a mild inflationary environment due to easing pressures on the labor market. Factors contributing to this include an influx of workforce from India and the integration of forcibly displaced people from Nagorno-Karabakh into Armenia’s labor market. These factors are expected to positively impact wages and enhance the potential of the Armenian economy, resulting in a lower inflation scenario and high economic growth.

In addition, he highlighted another scenario where inflationary expectations might persist to a certain extent. He pointed out that the scenario involves a salary increase of more than 10 percent, considered high. Furthermore, there is high inflation in the service sector. These factors could contribute to the maintenance of inflationary pressures in the economy.

He noted that recent polls indicate a dual possibility for both high and low inflation scenarios, reflecting the heightened uncertainties. However, he pointed out that, given the reduction in interest rates, the Central Bank considers the likelihood of inflationary scenarios to be lower at present.

The Armenian official emphasized the importance of timely reactions to curb inflation. He cited the Central Bank’s quick response when inflation was below the target, allowing for early initiation of measures to lower inflation.

“When the inflation was still below our target, we reacted quickly since we expected that the inflation would rise. This enabled us to start the lowering early. This is very important because it means we have ensured price stability without penalizing economic growth. The best evidence of this is the economic growth indicator,” said the deputy governor of the Armenian Central Bank.