Monday, November 12 2018 18:22

ArmInfo.Until the end of 2018, GDP growth rates in Armenia are likely to remain lower than in the first half of the year. This is stated in the next monthly,  October, report of the EDB <MacroBaz>. Nevertheless, according to the  results of 2018, according to the EDB forecast, the growth of the  Armenian economy will remain at a rather high level and will be 5.9%  compared to 2017.

The main reason for the slowdown in GDP growth, according to analysts  of the Bank, is the decline in agricultural production due to adverse  weather conditions affecting crop production for the current year in  crop production. The growth of the economy is also constrained by a  decrease in ore mining volumes against the background of increasing  requirements for compliance with environmental standards in the  current year. The impact of low yields and lower ore output on  economic activity was partially offset by accelerated growth in trade  and, to a lesser extent, investment growth.

Industrial production continues to make a positive contribution to  GDP growth. Strong results are still demonstrated by food production  (an increase in September of 14.0% y / y after 18.1% y / y in  August). At the same time, the restraining factor in industry was the  decline in output in metallurgy, where the fall in volumes in  September was 8.3% y / y.

The composite leading indicator, calculated by the EEC, indicates a  further slowdown in the growth of the Armenian economy in the short  term. Among the slowing down factors, there is a decrease in the  volume of remittances of individuals to the country compared with  2017, as well as with the dynamics of production in metallurgy. In  the coming months, the metallurgy industry may still experience  negative annual growth rates due to more restrained industrial  activity in the industry compared to the same period of the previous  year. In 2019, economic growth will be supported by the resumption of  growth in agriculture and, in the event of a resumption of activity  under suspended projects, the restoration of investment in ore  mining.  Inflation is supported by a relatively high increase in food  prices, which reached 5.3% y / y due to low yields. At the same time,  the rise in prices for non-food products and services in September  continued to slow down and amounted to 3.9% y / y, helped by a slight  decrease in prices for fuel and lubricants. Until the end of 2018 and  in early 2019, the stabilization of prices in the food and fuel  markets can have a restraining effect on inflationary processes. The  Central Bank of Armenia does not expect inflation to significantly  higher than 4% of the target level during 2018-2021. Under these  conditions, the CBA leadership left the refinancing rate at 6%  following the results of the meeting of the governing council on  September 25.

EDB analysts remind that Armenia has improved its position in the  Doing Business 2019 rating issued by the World Bank. Armenia occupied  the 41st place, having advanced six positions. Improvements have  occurred, primarily in terms of ease of connection to power grids,  protection of minority investors, taxation and enforcement of  contracts.