Real GDP growth in Armenia expected to be recorded at 4.5 per cent in 2019 and 2020 - EBRD
15.05.2019,
13:03
The European Bank for Reconstruction of Development expects the real GDP growth in Armenia will be recorded at 4.5 per cent in both 2019 and 2020. The EBRD analysts say in their Regional Economic Prospects report that the real GDP expanded by an estimated 8.5 per cent in the first half of 2018 before slowing down to an estimated 3.0 per cent in the second half of the year, giving an overall growth rate for the year of 5.2 per cent.
YEREVAN, May 15. /ARKA/. The European Bank for Reconstruction of Development expects the real GDP growth in Armenia will be recorded at 4.5 per cent in both 2019 and 2020. The EBRD analysts say in their Regional Economic Prospects report that the real GDP expanded by an estimated 8.5 per cent in the first half of 2018 before slowing down to an estimated 3.0 per cent in the second half of the year, giving an overall growth rate for the year of 5.2 per cent.
A contraction in production in the agriculture and mining and quarrying sectors weighed on the growth of exports and economic output in the second half of the year. At 28.5 per cent, capital investments were the largest contributor to growth.
However, this impressive growth is largely explained by one-off methodological changes; the increase in gross fixed capital formation was 5 per cent. Household consumption and exports both grew, albeit at lower rates than a year earlier.
According to the EBRD report, a strong expansion in consumer loans and a steady inflow of money transfers from abroad supported private consumption growth. The current account deficit widened significantly from 2.4 per cent of GDP in 2017 to 9.1 per cent in 2018, in part financed by foreign investments and increased bank deposits in foreign currency.
The dram remained relatively stable against the US dollar. According to preliminary estimates, economic output grew by 6.5 per cent year-on-year in the first two months of 2019. We expect this positive growth trend to continue with real GDP growth of 4.5 per cent in both 2019 and 2020.
In February 2019, the authorities reached a staff-level agreement with the IMF on a three-year Precautionary Stand-By Arrangement (SBA). Subject to approval by the IMF Executive Board, the SBA aims to support the new government program, which is focused on achieving stronger and more inclusive growth, while at the same time preserving macroeconomic and financial stability. --0---
A contraction in production in the agriculture and mining and quarrying sectors weighed on the growth of exports and economic output in the second half of the year. At 28.5 per cent, capital investments were the largest contributor to growth.
However, this impressive growth is largely explained by one-off methodological changes; the increase in gross fixed capital formation was 5 per cent. Household consumption and exports both grew, albeit at lower rates than a year earlier.
According to the EBRD report, a strong expansion in consumer loans and a steady inflow of money transfers from abroad supported private consumption growth. The current account deficit widened significantly from 2.4 per cent of GDP in 2017 to 9.1 per cent in 2018, in part financed by foreign investments and increased bank deposits in foreign currency.
The dram remained relatively stable against the US dollar. According to preliminary estimates, economic output grew by 6.5 per cent year-on-year in the first two months of 2019. We expect this positive growth trend to continue with real GDP growth of 4.5 per cent in both 2019 and 2020.
In February 2019, the authorities reached a staff-level agreement with the IMF on a three-year Precautionary Stand-By Arrangement (SBA). Subject to approval by the IMF Executive Board, the SBA aims to support the new government program, which is focused on achieving stronger and more inclusive growth, while at the same time preserving macroeconomic and financial stability. --0---
