Loans Will Be Taken Out Less Because There Will Be No Income: Galstyan

According to statistical data, interest rates on loans have increased over the past few years. This was stated by the President of the Central Bank of Armenia, Martin Galstyan, at a meeting with journalists.

"Interest rates on loans are related to the demand and supply for loans. It is clear that there is tremendous demand for consumer loans, and therefore the factors arising from that demand do not allow for interest rates on loans to be adjusted downward quickly. I should note that there has been significant growth in consumer loans in our country at the moment, and their interest rates are higher; thus, the figure you are mentioning is connected with that," he said.

Galstyan also mentioned under what circumstances interest rates on loans would decrease: "If there is a weakening of demand for consumer loans in the economy, then we would see a decline in certain purchasing power demand, which implies that loans will be taken out less because there will be no income, or it will not suffice. Naturally, if that much demand does not exist, we may see a certain decrease in the loan market."

Galstyan added that weak inflationary pressures are expected on the Armenian economy from the external sector: "The prices of goods and services characterized by rigid prices in partner countries continue to remain relatively high, while the conditions of the labor market are strict. In this context, it is probable that the central banks of leading countries will maintain relatively tight monetary conditions in the near future. As a result, weak inflationary pressures are expected on the Armenian economy from the external sector," he noted.