Presenting the Central Bank’s annual report in parliament, its chairman, Martin Galstyan, noted that 12-month inflation in Armenia during the first eight months of 2025 stood slightly above target, reaching 3.6% in August, Sputnik Armenia reports.
He said inflation was mainly driven by seasonal food products, as well as regulated services such as transport tariffs. At the same time, core inflation for non-tradable goods remained relatively stable, at 2–2.5% in recent months. Inflation expectations, he added, are gradually decreasing toward the target level.
“We will continue to monitor economic scenarios and are ready to take adequate measures to maintain inflation near 3% in the medium term and ensure price stability,” Galstyan stated.
He emphasized that Armenian banks’ loan portfolios have been expanding rapidly, with a 20% increase since the start of the year, while the share of non-performing loans is at a historically low level. The banking sector’s capital currently amounts to 1.8 trillion drams.
Galstyan recalled that in 2024 Armenia recorded high economic activity, largely driven by services, construction, and trade, according to Armenpress. However, in the second half of the year, growth slowed toward its estimated long-term sustainable pace, with annual GDP growth at 5.9%.
He said demand adjusted closer to a stable level, with external demand — especially tourism — slowing, while domestic demand strengthened thanks to higher incomes and household spending of accumulated savings. This trend, combined with an increase in labor supply, eased labor market pressures and stabilized wages, service prices, and inflation expectations.
Against this backdrop, the Central Bank gradually cut its policy rate by 2.25 percentage points in 2024, bringing it to 7% by December, with a preference for easing monetary conditions gradually. By the end of 2024, 12-month inflation stood at 1.5%, while core inflation was 0.9%.
