Problems in individual export markets may lead to a decrease in income in Armenia’s economy, as well as the formation of excess supply for individual products, containing mainly deflationary risks, Armenian News-NEWS.am has learned from the Central Bank of Armenia (CBA).

In the conditions of current macroeconomic developments, Armenia’s financial market participants on average expect that the CBA will maintain the current interest rate level for a little longer, reducing the policy rate to 6.25% in the medium term.

In the conditions of the discussed risks and existing uncertainties, on the one hand, the CBA Board considered Type A scenarios related to the possible increase in global neutral interest rates, the formation of excess demand conditions in Armenia’s domestic economy and the acceleration of inflation expectations, which require a higher policy interest rate compared to market expectations.

On the other hand, the CBA Board discussed Type B scenarios related to the prospect of a slowdown in global economic growth, the formation of deflationary risks as a result of problems in Armenia’s certain export directions, and a fundamental decrease in the risk premium of the country’s economy, which imply a lower policy interest rate compared to market expectations.