12-Month Inflation in Armenia Reaches 7.7%: Candidate for Central Bank Deputy Governor

The Parliament discussed the election of the Deputy Governor of the Central Bank. The session chair, Hakob Arshakyan, noted that according to Article 145 of the "Constitutional Law on the Rules of Procedure of the National Assembly," the permanent committee on financial and budgetary issues of the National Assembly recommends the candidate of Hovhannes Khachatryan presented by the "Civil Contract" faction for the post of Deputy Governor of the Central Bank.

The candidate's biography was presented by Gevorg Papoyan, the chair of the permanent committee on financial and budgetary issues. He stated that Hovhannes Khachatryan studied and graduated from the Faculty of Economics of Yerevan State University and holds a master's degree. In July 2020, he was elected as a member of the Board of the Central Bank of Armenia by the Parliament and is a member of the institution's audit committee.

During his speech, the candidate stated that the second half of 2020 was difficult for Armenia and Artsakh. He noted that elements of internal and external instability persisted until mid-2021: "From the second quarter of 2021, an unprecedented high inflation rate recorded in the global economy was added to these factors. Notably, a significant increase was observed in energy carriers and food products," he said.

He also reported that as of now, inflation in the U.S. has reached 6.8%, in the Eurozone 5%, and in Russia 8.4%. "Armenia also faced certain risks regarding prices and financial stability. In the early stages of the pandemic, the Central Bank of Armenia relaxed monetary conditions by lowering the interest rate by 1.25 percentage points and ensured unlimited liquidity to restore the reduced demand," he noted.

However, he stated, amid the war, there was a certain outflow of deposits, approximately 6.4%, an increase in the share of non-performing loans by 7.5%, and a notable decrease in lending rates. "As a result, an annual decline of 1.1% in economic potential was recorded. Volatility in financial markets increased. The Central Bank was one of the first in the world to sharply exit from the stimulating policy regime, with a cumulative interest rate increase of 3.5%,” Khachatryan announced.

He also revealed that as of the end of December, the 12-month inflation in Armenia stood at 7.7%, returning from a historically high level of 9.6% recorded in November.