Average inflation in Armenia

Average inflation measures the average change over the year in the prices of the basket of goods and services consumed by Armenian households, based on the Consumer Price Index. It is compiled by the Statistical Committee of Armenia (ArmStat) and tracked by the Central Bank of Armenia.

It is derived from a regular price survey across a sample of outlets and localities, weighting each product by its spending share. Average inflation is the mean of the twelve monthly rates of change over the year relative to the previous year, expressed as a percentage.

Inflation is the central reference for the Central Bank of Armenia's monetary policy, which operates an inflation target. A high reading puts upward pressure on interest rates and on the dram exchange rate, while contained inflation gives room to ease policy.

As an annual average it smooths the year's peaks and troughs and reacts with a lag to recent price moves. It only measures the defined basket rather than every good in the economy; for the underlying trend, analysts look at core inflation, excluding energy and unprocessed food.