May 2023. Republic of Armenia: Social and Economic Developments in 2022

In 2022, the economic growth accelerated significantly in the Republic of Armenia, reaching 12.6%, that was mainly a result of a substantial expansion of domestic demand. Despite initial scepticism about the prospects for economic growth, actual developments in 2022 resulted in positive externalities for the RA economy through an increase in the number of tourists, the relocation of highly qualified specialists from Russia, expanded exports of goods and services, and an increase in remittances. Inflation accelerated to 8.3%, driven by high prices on international commodity markets and stronger domestic demand. Under these conditions, the Central Bank of Armenia tightened the monetary conditions further, raising the refinancing rate by 300 basis points. The fiscal position improved, among other things, due to contractionary fiscal policies consistent with the Government's plans for smooth consolidation. The balance of payments strengthened as a result of a reduction in the CA deficit and a substantial inflow under the financial account.

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