By Mark Dovich
Armenia’s Central Bank Tuesday cut interest rates by 25 basis points to 9.5%, as inflation in the country continues to ease and the economy continues to grow.
“Twelve-month inflation increased in September, ending the month at 0.1%. 12-month core inflation continued to decrease, ending the month at -0.1%,” Armenia’s monetary authorities said in an explanatory note.
It marks Armenia’s fourth interest rate cut since June. Prior to that, the Central Bank had not lowered rates for more than two years.
What’s the context?
Armenia’s economy continues to expand substantially after an eye-popping 12.6% growth in gross domestic product last year, largely on the back of massive inflows of capital and labor from Russia and soaring trade between the two countries.
Last month, the country’s Central Bank hiked its GDP projections for this year to 7.2%, citing stronger-than-expected showings in the construction and services sectors.
Figures out last week from Armenia’s Statistical Committee show double-digit growth in construction, services, and trade in the first three quarters of the year, even while agriculture remained largely stagnant and industrial output dropped slightly.
In contrast to Armenia’s Central Bank, Georgia’s National Bank last week declined to lower that country’s interest rates after two consecutive cuts since August, citing “an unstable environment globally.”
