YEREVAN, January 29. /ARKA/. Price growth fell into deflationary territory in Armenia in 2023 (December: -0.6%), as the effects of a strong dram, lower international food prices, and the lagged impact of a tight monetary policy were felt. Fitch's expectation of a weaker dram will result in higher inflation in 2024-25, averaging 3.9% (target: 4%), Fitch Ratings said in a report.

It recalls that the central bank cut rates by a cumulative 150bp to 9.25% in 2023. High dollarization levels impede monetary policy transmission to some extent.

In December last year, the Central Bank of Armenia predicted that by the end of the year the country would have zero inflation.

The IMF expects inflation in Armenia to return to and stabilize around the Central Bank's 4% target by mid-2024. -0-