Tuesday, May 24 2016 19:51
Alina Hovhannisyan

IMF: A 2.2% economic growth insufficient to improve living standards of population IMF: A 2.2% economic growth insufficient to improve living standards of population

IMF: A 2.2% economic growth insufficient to improve living standards  of population IMF: A 2.2% economic growth insufficient to improve living standards  of population

ArmInfo. A 2.2% economic growth is not sufficient to improve the living standards of the population in Armenia, Teresa Daban Sancez, IMF Resident Representative for Armenia, said at a public presentation of the latest "Policy Challenges for Armenia in the Context of Regional and Global Economic Shocks: An Update" on May 24. 

 
Despite the external shocks Armenia's economy is facing, she said, the country will further see upward trends of economic indicators but with moderate rates. Ms. Daban Sancez said the economic growth will be below the potential 4%.  According to her, IMF reduced the economic growth rate forecast for Armenia from 2.8% to 2.5%.
 
IMF representative said that the global economy is being restored now. She pointed at the slackening growth rates amid growing state budget deficits. In this light, Ms Daban Sancez said the IMF reduced the global economic growth forecast from 3.6% to 3.2% for 2016, and 
from 3.8% to 3.5% for 2017.  For the U.S. market, slackening of the economic growth rate in 2016 will range between 2.8% - 2.4% and 2.8%- 2.5% in 2017.  According to the IMF, the Eurozone will see a 1.5%-1.7% economic growth in 2016 and 1.7% in 2017.  As for the emerging markets, Teresa Daban Sancez said the economic growth rates will fall from 4.5% to 4.1% in 2016 and 4.9% to 4.6% in 2017.  
 
The situation in the Chinese market will be different, as the IMF forecasts an increase in the economic growth rate from 6.3% to 6.5% in 2016 and 6%-6.2% in 2017.  The economic growth decline in Russia in 2016 will deepen to 1.8% from 0.6%, but the economic growth 
forecasts for 2017 is reduced from 1% to 0.8%.  As for the risks the economy of Armenia may face, the expert outlined the low economic growth of the country's key trade partners - Russia, China and Europe. Therefore, Ms. Daban Sancez urged proper management of economy in those countries. Another risk may come from further sliding oil prices in the globalmarket, which will negatively affect the developing economies.  The last risk is the toughened financial conditions in the global market, the IMF representative said. 
 
The expert called it important for the country to demonstrate a balanced economic management to ensure investment flows, increase expending and raise financial resources from the international financial organizations.  She urged careful steps not to increase the 
state debt. 
 
At the same time, Teresa Daban Sancez recalled the surveys by the EBRD experts saying that the prior measures necessary to improve the economic situation in the country is the access to finance and political stability coupled with optimization of the tax administration. 
 
The IMF representative said Armenia's economy needs a strategy, a complex approach and combined work in such sectors and agriculture, mining and tourism, first. 
 
To recall, International Monetary Fund (IMF) has upgraded its forecast for Armenia's economic growth in 2016 to 2.25-2.5% versus earlier forecasted 2.2%. World Bank forecasts a 2.5% GDP growth for Armenia in 2016.  EBRD forecasts economic growth to 2% in 2016. The 
Central Bank of Armenia revised its economic growth forecast for Armenia in 2016 from the previous 3.2- 3.9% to 1.6-2.7%, in its monetary policy program for Q4 2015. The state budget of Armenia fixed 2.2% GDP growth in 2016. According to the National Statistical Service of Armenia GDP growth in Armenia in 2015 totaled 3% versus 3.5% in 2014. According to the statistical data economic activity in Q1 2016 grew by 5.6% y-o-y versus 2.5% growth in the same period of 2015.
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