IMF forecasts 1.2% growth for Armenia in 2010

YEREVAN, October 3, /ARKA/. The International Monetary Fund (IMF) forecasts a 1.2% growth for Armenian economy in 2010. According to the twice-yearly World Economic Outlook, the world is poised to grow by 3.1 percent in 2010 with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 percent in the IMF's previous set of estimates. And for 2009, the IMF now expects a 1.1 percent decline of global GDP instead of the 1.4 percent contraction it predicted in July.

The International Monetary Fund lowered its economic outlook for Russia and other former Soviet states this year as stimulus measures fail and bank lending is slow to recover. Russia will shrink 7.5 percent this year, compared with an earlier forecast for a 6.5 percent slump, the Washington-based lender said in its World Economic Outlook today.

The IMF revised down its projection for the Commonwealth of Independent States and two neighboring countries to a 6.7 percent contraction. The risks “for the region are tilted downward, with greater risks for economies that are in deeper recessions and face difficult financing conditions,” the report said.

The worst global slowdown since World War II has eroded demand for raw materials from CIS nations like Ukraine and Kazakhstan, while a drop in the flow of remittances from Russia has hurt economies in the Caucasus and Central Asia. Armenia, Tajikistan and Belarus were among countries to devalue national currencies and tap emergency funding from the IMF.

The fund raised its 2010 forecast for regional economies including Georgia and Mongolia, which are not members of the CIS, a grouping of post-Soviet nations, to growth of 2.1 percent

The combined economies in the area grew 8.6 percent in 2007 and 5.5 percent last year, according to IMF data. The lender earlier forecast a 5.8 contraction for the region this year, followed by growth of 2 percent in 2010.

Russia’s government expects the economy to contract 6.8 percent in the second half and 8.5 percent in 2009. Output shrank a record 10.9 percent in the second quarter.

Armenian economy contracted by 18.4% in January-August. Its GDP slashed, according to official figures, to 1.7 trillion Drams. ($1 – 383. 32 Drams). M.M. -0-