Armenia’s central bank revises upward its earlier economic projection

YEREVAN, May 25. / ARKA /. Armenia’s Central Bank has revised upward its earlier outlook for economic growth saying in a report that it expects the 2015 GDP to grow by 1.6-2.6%.  Its previous forecast was 0.4% - 2%.

The regulator said the upward revision was prompted by the easing of monetary conditions in the first quarter against the background of ongoing financial stability, implementation of a more stimulating fiscal policy than projected, as well as by positive developments in the agricultural sector.

The Central Bank, however, singled out low global economic growth, decline in domestic demand and  low international prices for mining metals.

According to the Central Bank, both private consumption and private investment will slash this year by 2.5% and 8% respectively. It also expects a 7-9% growth in exports and a 4-6% decline in imports. It also expects a 25% drop in private remittances to Armenia.

According to the Central Bank forecasts, the industry will grow by 1.5-2.5%, while the construction sector will see a decline of 0.5-1.5%; services will rise by 0.6-1.6% and agriculture is projected to increase by 6.5-7.5%. It also expects a 2.1-2.5% GDP growth for the first quarter.

"Effective implementation of government programs aimed at promoting exports and investment, the gradual improvement of the external economic environment and structural reforms will accelerate economic growth in 2017 in conditions of stable inflation. In view of these developments, we expect that Armenia's economic growth will accelerate to 3.5-5% by the end of the forecast period ", the regulator said.

The government projection of economic growth in 2015 set  in its budget is 4.1%; inflation projection is (± 1,5%).