ArmInfo. Central Bank of Armenia raised the forecast range for GDP growth for 2018 from the previous 4.6-6.5% to the current 5.6-6.9%, more modestly revised upwards, the expected growth threshold for 2019 - 4.6-6.4%, and by 2020 - 4.1-6.2%, against 4.1-6.2% previously predicted and 3.9-6.1% respectively. Moreover, the increase in the medium- term forecast for the growth of GDP, the Central Bank determines the expected high investment activity this year. This is set out in the Central Bank's monetary policy program (QCP) for the third quarter of 2018, published in late August.
Here is the updated forecast for private sector consumption growth of 3.4% and investment - by 37%, the impact of which on economic growth is estimated at 8.2 percentage points, while the positive impact of exports on GDP growth is estimated at 0.6% of the item, while the effect of state expenditures on GDP growth will be negative by 2.6 percentage points. As a comparison, it should be noted that in the previous forecast it was expected that the growth of private sector consumption by 3.7% and investments - by 9.5% - would have an impact on economic growth by 4.6 percentage points, while the positive impact of exports on GDP growth was estimated at 2.6 percentage points.
In the second half of this year, the Central Bank expects a slowdown in export growth due to the slowdown of the mining industry, according to which the forecast for export growth for 2018g from the previous 11- 13% has been revised up to the current 8-10%. On import, the Central Bank expects in the second half of this year a decline due to a slowdown in domestic demand, including due to the suspension of the Amulsar program investment. But given the higher than expected growth rates of imports in the first half of the year, the forecast for import growth for 2018 is in the range of 6-8%, compared with the previously expected 5- 7%.
The forecast for the growth of remittances for 2018 is revised downward from the previous 7-9% to the current 5-7%, due to a more significant than expected depreciation of the ruble.
Proceeding from the above, the Central Bank also revised the forecast for the ratio of current account / GDP deficit to 2018, expecting some increase - to 4-5%, with stabilization in the medium term near 3%.
It should be noted that according to the forecast of the World Bank in 2018, updated in June 2018, the growth of Armenia's GDP will be 4.1%, slowing down to 4% in 2019-2020. In the state budget of the Republic of Armenia in 2018 GDP growth is set at 4.5%.
According to the State Committee of Armenia, Armenia's GDP grew by 1.7% in 2017 AMD 5.580 trillion ($ 11.6 billion). A year earlier, in 2016, GDP growth slowed down to 0.2% from 3.2% in 2015. The index-deflator of GDP in 2017 was 102.2%, against 100.5% in 2016. The economic growth of 2017 supported the services sector - by 14.4% per annum, trade - by 14%, and the industrial sector - by 12.6%, against a growth of 7.1%, 0.1% and 6.7%, respectively, a year earlier . The energy complex and the construction sector - 6.1% and 2.2%, which recorded a year-earlier decline of 6.2% and 10.8%, also provided a relatively modest growth. Against this background, the agricultural sector, having delayed in recession, only slowed down to 3% from 5.2% in 2016. Armenia's foreign trade turnover for 2017 increased by 26.9%, in particular exports - by 25.2% and imports - by 27.8%. A year earlier, in 2016, foreign trade turnover grew by 7.4% due to an increase in exports by 20% and imports by 1.6%.
According to statistics, economic activity in the first half of 2018 increased by 8.9% per annum against the background of growth of foreign trade turnover by 28.9%, in particular exports - by 20% and imports - by 33.9%. Services and the construction sector grew by 18.1% and 13.5% respectively, while other industries showed a modest climb: the trade sector - by 9.1%, the agricultural sector - 5.5%, the sector - by 3.7% and energy complex - 1.5%. The year before, in the first half of 2017, the growth of economic activity amounted to 6.1% per annum and the drivers of the trade sector, the industrial sector and services sector - 12.6%, 12.4% and 10.9% respectively, and the growth of foreign trade turnover by 24% was provoked by the ascension of exports by 21% and imports by 25.8%.