YEREVAN, July 8. /ARKA/. Armenia’s Central Bank said today it expects the deflation rate to slow down significantly later this year, saying also it predicts a weak inflationary environment in the coming months with steady inflationary expectations.

According to official data, deflation has been recorded in Armenia since the beginning of the year. Thus, according to the National Statistical Service, consumer prices decreased by 1.5% in January-April compared to the same period in 2015.

The Central Bank said also in May 2016 the deflation was 0.7%, prompted largely by lower prices for food products, especially for vegetables and potatoes, dairy products and eggs. A 0.1 percentage point drop in the cost of non-food products also contributed to the negative dynamics of growth of prices.

"As a result, the deflationary processes in May led to a 2.1% fall in the 12 -month inflation rate", the regulator said.

The Central Bank said under these circumstances, the Central Bank Board considers it appropriate to further reduce the refinancing rate, which will phase out the deflationary environment, as well as  return  the 12-month inflation rate to the projected target.

The Central Bank lowered the refinancing rate by 0.25 percentage points this past June 28, setting it at 7.5% .-- 0--