Armenia's economy is expected to expand by 2% in 2016 before accelerating to 2.3% next year, the Eurasian Development Bank (EDB) said in the latest quarterly outlook.
Both estimates represent a deterioration from the bank's previous forecast published in July when GDP growth was projected at 2.6% for 2016 and at 4.2% for next year. Armenia was the most buoyant economy in Central Asia and the Caucasus in the first half of 2016 thanks to a 2.8% y/y GDP growth, EDB said. Growth in the first quarter was particularly strong at 4.5% y/y but it eased sharply to 1.5% y/y in the second quarter and has been falling since.
The slowdown has been prompted by a fall in industrial production, the development bank explains. Meanwhile, the 9.6% y/y increase in exports in the first half-year, coupled with a 5% reduction in imports, has helped boost economic growth.
Thanks largely to the foreign trade dynamic, the country's current account deficit sank to a record low of $166.7mn in the first half-year, the EDB reports. Furthermore, the dram's stability - the Armenian currency is slightly overvalued in relation to the Russian ruble - enabled the central bank to increase its reserves by $171.5mn since May, the lender writes.
Meanwhile, falling remittances from Russia, which declined by 15.6% y/y, were partially offset by an expansionary fiscal policy. Spending on public projects will, however, push the budget deficit to 4.1% of GDP by year-end, and government debt to 51.9% of GDP, the report concludes.
Officials in both Baku and Yerevan claimed on April 23 that the security situation has worsened along the line of conflict in the disputed breakaway Nagorno Karabakh Republic (NKR). The ... more
Armenia, Azerbaijan and Georgia are enjoying a welcome injection of revenues from the annual influx of Iranians enjoying their long Nowruz Persian new year holiday. Anecdotal evidence indicates ... more
Russia’s Energy Minister Aleksander Novak has said Iran could join the Eurasian Economic Union (EEU) by May, RT reported on March 10. Tehran has repeatedly lobbied Moscow over the past year to ... more