YEREVAN, February 13. /ARKA/. Armenia’s Central Bank has predicted a 4-5.5% inflation by the end of quarter two saying the probability is 86%. This forecast can be found in Central Bank’s Program on Money and Credit Policy for the First Quarter of 2011 in which it says the yearend inflation rate will drop to 3-5.5%. The probability of this development is 78.2%, according to the Central Bank.

The projected inflation model for separate commodity groups is based on a version that the current market interest rates will be maintained, which in the short-term perspective implies an unchanged level of monetary and credit terms.

The Central Bank says it does not expect increasing inflationary pressures from international food and raw commodities and neither domestic demand will expand the inflationary environment.

"At the same time, the risks from the agricultural sector and climatic conditions can lead to both an increase and decrease in inflationary pressures," the Central Bank says. It also believes that the inflation by the end of year will amount to 4.5%. The 2002 budget projection is 4% (± 1,5%). -0-