ArmInfo. Economic growth in Armenia in the medium term will tend to 5% per year. This is stated in the macroeconomic review of Armenia prepared by the Directorate for Analytical Work of the Eurasian Development Bank (EDB).
The review authors note that by the end of 2018, the growth of the Armenian economy was 5.2%, after 7.5% a year earlier. The main factor behind the slowdown in economic activity was a more moderate growth in household consumption and a decline in consumption in the public sector compared with 2017. The review authors expect that GDP growth in Armenia will accelerate somewhat in 2019. This will be facilitated by an increase in investment activity in the conditions of a gradual adaptation of the extractive industry to new requirements, the restoration of agricultural production, as well as government policies aimed at supporting investment, exports and the improvement of social conditions.
In 2018, in the face of growing economic activity, a restraining fiscal policy was conducted in order to maintain debt and fiscal sustainability. In the medium term is expected to maintain the focus of fiscal policy.
. The review notes that in 2018, inflation in Armenia remained below the target level of the Central Bank of the Republic of Armenia (CBA) 4% and in December 2018 was 1.8% y / y. The main factor determining the dynamics of inflation in 2018 was the volatility of prices for food products amid a decrease in yield.
The review notes that in 2019, inflation will accelerate to 2.8%. Growing inflation will be boosted by rising domestic demand amid rising wages and lending. By the end of 2021, inflation will approach the target level of the Central Bank of Armenia (4%).
According to the forecast, with the gradual acceleration of inflation processes and inflation approaching the target level, the CBA will launch a series of rate increases, which, according to analysts, will be neutral in terms of its impact on economic growth and inflation.