Wednesday, April 11 2012 21:06
Asian Development Bank forecasts 3.8% GDP growth and 4.1% inflation in Armenia in 2012
ArmInfo. The Asian Development Bank forecasts 3.8% GDP growth in Armenia in 2012 and 4.2% growth in 2013.
The bank's Asian Development Outlook says that inflation will be 4.1% and 4.5%, respectively.
The outlook says that "Armenia's economic recovery is expected to continue in 2012 and 2013 though a shade less quickly than in 2011. Weak economic prospects in Europe (which accounts for about 60% of Armenia's exports) and their possible spillover to the Russian Federation (80% of remittances) pose major risks to economic growth.
Although a pronounced global slowdown could reduce revenue, sustained reforms in tax, customs, and economic competition are expected to raise the tax-to-GDP ratio. They include a strong tax package adopted in 2011 that raised excises on liquor, luxury vehicles, and engine oil, the marginal rate on high-income taxpayers, and higher tax rates on gambling facilities and restaurants. Good revenue performance would enable the government to increase social security benefits and pensions, while reducing the overall budget deficit.
Armenia's recovery continued in 2011, bolstered by buoyant growth in industry and agriculture. Prudent fiscal and monetary policies helped control inflation and lower the budget deficit, although public debt remained high in 2011, leaving little room for fiscal maneuver. The external accounts generally improved.
Economic growth will continue in 2012 and 2013—but with downside risks— and over the medium term, continued and faster structural reforms are needed to support growth.
The central bank raised the refinancing rate by 125 basis points in three steps in February–April to 8.5% and kept it steady until September, when it was cut by 50 basis points to 8.0%, owing to diminishing inflation pressures."
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