Economy minister disagrees with central bank’s forecasts
YEREVAN, June 15. /ARKA/. Armenia’s Economy Minister Vahan Kerobyan expressed his dissatisfaction today with the Central Bank for revising the 2022 growth projection upward only to 4.9% from the previous forecast of 1.6%
Speaking to reporters, Kerobyan said he did not agree with this and other forecasts made by the Central Bank.
Central Bank chairman Martin Galstyan said the day before that the upward revision was prompted by better than expected performances of construction and services sectors, the arrival of thousands of Russian citizens, as well as by a better than expected performance of the Russian economy.
"The economy has been very active since the beginning of the year. In the first two months of 2022 we had 12% growth, although we cannot say that the economy has recovered at full. The overall situation has not been bad," Kerobyan told journalists.
Asked what steps are being taken to mitigate the losses sustained by exporters because of the drastic appreciation of the dram, Kerobyan said: "We have no influence on the Central Bank, but we see that there is widespread dissatisfaction from various sectors regarding this kind of policy."
"We went through this once in 2004-2007, and it did not lead to anything good: the manufacturing industry, one might say, was destroyed in those years," said Kerobyan, adding that everything should be done to prevent a repetition of such a scenario.
‘There are ongoing consultations and discussions to find solutions and attempts are being made to persuade colleagues to find other tools to curb inflation instead of artificial strengthening of the dram,’ he said.
Armenia’s currency, the dram, has strengthened against the US dollar by more than 25 percent since the middle of March. Analysts says one of the reasons behind this unprecedented rally of the dram is the arrival of thousands of Russians to Armenia (after Russia launched so-called special operation in Ukraine) who opened thousands of bank accounts here.
Armenian government’s growth projection for 2022 is 7%, and the inflation is set at 4% (± 1.5%). According to the World Bank’s latest Global Economic Prospects report, Armenia's GDP in 2022 is expected to grow by 3.5%, down 1.3 p.p. from the previous forecast, made in January.
World Bank analysts expect Armenia's GDP to grow by 4.6% in 2023 (0.8 p.p. down from the January forecast) and by 4.9% in 2024.
Armenia's economic activity index (EAI) in the first 4 months of 2022 registered a 9.4% year-on-year growth, the National Statistical Committee reported earlier. -0-
