EBRD forecasts slower and moderate economic growth for Armenia in the medium term
YEREVAN, November 27. /ARKA/. The European Bank for Reconstruction and Development (EBRD) expects Armenia's GDP growth to moderate in the short term after several years of ultra-high growth, said Elisabetta Falcetti, EBRD Managing Director for Turkey and the Caucasus.
‘’Indeed, we forecast real GDP growth to ease to 6.2 per cent in 2024 and 4.8 per cent in 2025 which is close to Armenia’s long-term potential growth rate,’’ she said in an interview with the ARKA news agency.
According to Falcetti, temporary capital inflows related to the war on Ukraine have dissipated, but increased government spending to meet the needs of refugees and to strengthen national defenses will compensate to some extent.
‘’However, geopolitical uncertainty poses sizeable risks to the economic outlook with a potential to affect it in both directions,’’ noted she.
The managing director said that in short term growth will be led by consumption and traditional sectors, however, the future growth potential of the economy is closely dependent on its diversification.
‘’Due to the geography and logistical challenges for integration in global value chains, the opportunity is seen in the expansion of IT services, hospitality industry and outsourcing of business services as well as in increasing the value added in agriculture and mining,’’ explained she.
Falcetti also pointed out that agriculture currently employs one fifth of the employed population but with very low productivity.
‘’Therefore, the focus should be on introducing innovative solutions and new technologies, with the goal of moving agricultural products up the value chain for export,’’ added she.
Figures and forecasts for the Armenian economy
The state budget for 2024 envisages economic growth in Armenia at 7%. The Central Bank of Armenia expects the country's economic growth in 2024 to be in the range of 6.5-5.8%. The draft state budget for 2025 envisages economic growth at 5.6%.
The EDB forecasts Armenia's GDP growth at 7.5% in 2024 and 4.2% in 2025. The WB expects Armenia's economy to grow by 5.5% in 2024 and by 5% in 2025. The IMF forecasts 6% growth in the Armenian economy in 2024 and 4.9% in 2025. The EBRD forecasts economic growth in Armenia at 6.2% in 2024 and 4.8% in 2025. ADB forecasts 5.7% for 2024 and 6% for 2025. According to Fitch Ratings, Armenia's economic growth will be 6% in 2024 and 4.9% in 2025. S&P forecasts 6.2% growth for Armenia in 2024, and the UN expects the Armenian economy to grow by 5.2% in 2024 and 4.8% in 2025.
