Thursday, March 27 2014 17:21
Central Bank of Armenia expects private spending to rise by 4.5% in 2014
ArmInfo. The Central Bank of Armenia (CBA) forecasts high growth rates of aggregate demand for 2014. According to the CBA's monetary policy program for Q1 2014, aggregate demand in 2014 will grow by 6.1%, and in the second half of 2015 the growth rates of aggregate demand will slow down and stabilize in compliance with the economic growth.
The CBA expects private consumption to rise by 5.3% in 2014 (against 1.8% growth fixed in 2013). In Q3 2014 private consumption growth rates will accelerate and remain high in early 2015 due to household income growth to be caused by expected rise in salaries and pensions in 2014. Thereafter, in 2015-2016 private consumption in Armenia will increase by about 4%.
Private investment will grow by about 4% in 2014. This forecast is based on the economic activity in Q4 2013, which was weaker than expected due to decline in construction. It should be noted that introduction of the compulsory accumulative pension system will to some extent increase the savings in the economy and, subsequently, will have a positive effect on private investment. In 2015-2016 recovery of construction will lead to growth in private investment, which will allow ensuring the economic growth targeted for that period.
In that case, private spending growth rates will accelerate to 4.5% in 2014. The beginning of 2014 will fix a recessionary gap of private spending, which will be zeroed in late 2014.
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