YEREVAN, April 2. / ARKA /. The Asian Development Bank says in its latest Asian Development Outlook report that Armenia’s economy in 2014 will grow by 4.6 % and by 5 percent in 2015.
According to the report, this rate of GDP growth will be due mainly to Armenia’s decision to join the Customs Union of h Russia, Belarus and Kazakhstan.
"Despite long-term benefits from the expansion of the market, low customs duties, more efficient movement of labor and capital, as well as potential growth in foreign direct investment, only time will tell how the changes of trading conditions will effect trade relations between Armenia and other countries outside the trade bloc," the report says.
The report says that economic growth in Armenia will also be helped by domestic factors, such as tax and customs reforms and improving business environment, along with the policy of "open skies" , adopted in 2013.
At the same time, a significant increase in wages and pensions in 2014 and the continued impact of rising energy prices will result in a 12-month 4.5% inflation, which will drop to 4% in 2015.
According to the outlook, budget deficit in 2014 will be around 2.3% of GDP, due to high capital costs and the increase in salaries and pensions.
Current account deficit of the balance of payments is projected to be at 8.7 % of GDP in 2014 and 8% in 2015. At the same time, exports are expected to grow 6.2% in 2014 and 6.5 % in 2015, while imports - 3.5 % and 4.3 %, respectively.
The government’s projection of inflation for 2014 is 4 % (± 1,5%), GDP projection is 5.2%.-0-