October 2023. Republic of Armenia: Social and Economic Development in the first half of 2023 and medium-term prospects

In the first half of 2023, the Armenian economy continued to be influenced by the positive externalities manifested in 2022. In January-June 2023, economic growth in the Republic of Armenia was supported by both external and domestic demand. Inflation slowed significantly amid the strengthening of the Armenian dram, lower prices in international commodity markets, the high base of the previous year and the impact of monetary policy tightening in 2022. As a result of the significant easing of inflationary effects, the Central Bank of Armenia lowered the refinancing rate by 0.25 p.p. to 10.5%. The fiscal position improved due to higher tax revenues amid low absorption of budget expenditures. The CA deficit widened slightly amid deteriorating trade balance and weakening remittance inflows.

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