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EDB gave a forecast for Armenia's GDP

05.10.2020 101 просмотров

The EDB expects the GDP of the Republic of Armenia to decline by 3.5% in 2020. In 2021–2022, economic growth is forecast to be in the range of 7–9%.


The Eurasian Development Bank (EDB) predicts that the GDP of the Republic of Armenia will decline by 3.5% in 2020, but will return to growth in 2021-2022. This is stated in the macroeconomic & nbsp; review of the Republic of Armenia prepared by the EDB Analytical Directorate.


The report notes that the Armenian economy experienced a 5.7% YoY decline in the first half of 2020. The main reason for the decline in real GDP was the negative impact of the COVID-19 pandemic. The country is experiencing a reduction in consumer and investment demand due to sanitary restrictions, a decrease in income, including income received in the form of transfers from abroad, employment, and increased uncertainty.


According to EDB's base case scenario, the economy is projected to recover in 2021-2022 at the level of 7-9% per annum, supported by factors such as expanding cash remittances to the country and an increase in prices for export products (in particular, for ores and metals) as the economic situation in the world normalizes, as well as due to stimulating fiscal and monetary policies.


The review notes that inflation remained below the target interval of the Central Bank of the Republic of Armenia (CBA) (4 ± 1.5%), amounting to 1.7% y / d in June and 1.8% y/y in August 2020. Its acceleration from 0.7% y/y at the end of last year is mainly due to the contribution of the dynamics of seasonally volatile and regulated prices. The EDB forecast assumes a steady return of the growth rate of the cost of the consumer basket within the limits envisaged by the CBA policy in 2022, influenced by the recovery in aggregate demand. The authors of the review expect the CBA to start raising interest rates at the end of 2021 amid a gradual acceleration of inflation.


At the moment, there are still risks of a worsening economic situation associated with the danger of new outbreaks of coronavirus both in the world and within the country. Geopolitical risks, including those caused by the sanctions policy of the West against the economic partners of Armenia (Russia), may also affect the economy of Armenia.

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