YEREVAN. - The International Monetary Fund (IMF) expects inflation to reach the target (4±1.5%) in Armenia in the first half of 2012, IMF Resident Representative in Armenia Guillermo Tolosa told journalists on Friday.

The IMF forecast is to an extent different from that of the Central Bank of Armenia (CBA), which expects inflation to reach the target this year end.

Inflation is rapidly falling in Armenia, Tolosa said. He pointed out three factors stabilizing the prices, which include decreasing international prices for food and fuel, achieving a fruitful agricultural year, and adequate actions by the Armenian government and CBA aimed at raising interest rates, reducing the budget deficit, and maintaining a stable macroeconomic environment.

On the other hand, Mr. Tolosa is highly critical of the government`s decision on administrative regulation of prices for some products. Such measures cause deficit, smuggling and market fluctuations, the IMF official said.

Tolosa welcomes the new Armenian law granting greater powers to the Commission on Protection of Economic Competition. In many cases monopolies push up prices, the IMF official noted.

As regards the Central Bank`s policy, Tolosa said that some financial instruments are no so effective in Armenia as in other countries. He promised active technical aid to the Central Bank in restoring the power of the instruments (primarily, the re-financing rate policy).