Chairman of the Central Bank of Armenia (CBA) Arthur Javadyan said that as a result of toughening of the CBA monetary-credit policy and implementation of measures to prevent dollarization, as well as implementation of the governmental policy aimed at reduction of the state budget deficit, the annual inflation rate was reduced by 3.6% in the first half of 2010.

“However, the second half prepared new challenges for us,” Javadyan said during a resulting news conference.

According to him, inflation rates have considerably increased starting from July, amounting to 9.6% in November, what was conditioned by a significant growth in prices for foodstuffs in the global market and 17% drop in agricultural production

Despite the expected level of 9.7% inflation rate, 6-7% of this level was conditioned by the aforementioned shocks of the supply beyond the CBA control.

Javadyan stated that the CBA efforts will be aimed at overcoming these shocks, so that they do not affect other participants of the market and do not become inflationary pressures.

Besides, he noted that GDP growth has rehabilitated in 2010 due to industries and services, which helped diversification of the economy.