Inflation in Armenia Reaches the Central Bank’s Target Range – EDB
According to the latest weekly macroeconomic review by the Eurasian Development Bank (EDB), inflation in Armenia has successfully reached the target range set by the Central Bank. For 2025, the state budget projects inflation at 3% (±1%), indicating a stable economic outlook.
In February, consumer price growth accelerated to 2.5% year-on-year (y/y), up from 1.7% y/y in January. This increase in inflation was primarily driven by a significant rise in food prices, which surged by 4.5% y/y in February compared to 2.5% y/y the previous month. Additionally, the non-food segment experienced a slowdown in price decreases, with a decline of only 0.3% y/y after a more substantial drop of 1.5% y/y in January.
EDB analysts have reaffirmed their earlier forecasts of accelerating price growth in the coming months, predicting that inflation will remain close to the Central Bank of Armenia's target.
Inflation Forecasts
The Central Bank's monetary policy report for the fourth quarter of the previous year anticipates that inflation in Armenia will range between 3.9% and 3.2% by the end of 2025. Looking further ahead, forecasts for 2026 suggest inflation will be between 4.2% and 3.8%, while projections for 2027 indicate a target of 4%.
Various international organizations have also provided their inflation forecasts for Armenia. The World Bank expects inflation to be 3.5% in 2025 and 4% in 2026. The International Monetary Fund (IMF) predicts a 3.7% increase in prices for 2025, while the Asian Development Bank (ADB) forecasts a lower inflation rate of 2.5% for the same year. The EDB itself anticipates inflation to reach 3.1% by the end of this year.
Overall, the current inflation trends and forecasts suggest a cautiously optimistic economic environment in Armenia, with the Central Bank's measures appearing to stabilize price growth within the targeted range.
