CBA will possibly revise previously forecasted 2.7-3.6% economic growth for 2016 towards slackening

ArmInfo. Central Bank of Armenia does not rule out the possibility of revising its forecast on economic growth for 2016 from previous 2.7-3.6% to lower indicators, Head of Monetary Policy Department of CBA Vahagn Grigoryan stated answering to ArmInfo's correspondent's questions at today's press conference, adding that the new forecast will be published in November in revised Program of CBA Monetary Policy for 2016. The CBA explains the expected change of forecast by the fact that following high economic activity in the first half of 2016 indicators of the Q3 testify to deterioration of prospects on economic growth.

In its previous Monetary Policy Program of CBA for Q2 2016 the Central Bank of Armenia (CBA) has improved its economic growth forecast for 2016 to 2.7%-3.6% from previously forecasted 1.5-2.6% due to upwards trends in industrial and service sectors. In the industrial sector, 3.2%-4% growth is forecasted versus the previously forecasted 1.3%-2.1% for 2016. The construction sector growth forecasts were reduced to negative 0.8% to 0.4% (versus previous negative 0.8% to 0.2%). The forecasts for the agricultural sector was left almost unchanged - 4%-5% versus 4.2%-5%. In addition, the CBA forecasts slower reduction of the volume of private money remittances to Armenia to 6%-8% versus previously forecasted 9%- 12%  (in terms of USD). The regulator explained this with the slacking economic decline in Russia and neutralized expectations of the ruble devaluation. The current account deficit to GDP ratio will be at 1%-2% and will reach 2%-3% in the short- term outlook versus earlier forecasted 3%-4%.  

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 1.9% (vs previous 2.5%) GDP growth for Armenia in 2016, and 2.8%-2.9% in 2017-2018. 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 1.5%-2.6% to 2.7%- 3.6%, in its monetary policy program for Q2 2016. The state budget of Armenia fixed 2.2% GDP growth in 2016 - 4%, a 12-month inflation  - 4% (+1.5%). 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 Jan-Aug 2016 grew by 2.4% y-o-y versus 3.9% growth in the same period of 2015 mainly due industry (7%) and services (8%). At this background growth of agriculture was moderate-4.1% y-o-y. At the same time trade sector is in negative trend-0.4%, construction and energy sector also demonstrated decline-7.5% and 5.9% respectively. In the same period of 2014 the economic growth was even higher-4.1%.  Recently during an economic forum on September 20, Minister of International Economic Integration and Reforms Vache Gabrielyan stated that economic growth in Armenia at year-end 2016 will be 2.5-3.5%.