ArmInfo.The Asian Development Bank (ADB) forecasts for Armenia an increase in 2020 of the current account deficit to GDP to 8.6%, with a slight decrease in 2021 to 8.2%. This forecast was published on April 3 in the ADB economic report, Asian Development Outlook 2020.
The ADB report also indicates the forecast of this indicator for the countries neighboring with Armenia. In particular, in 2020, the current account deficit to GDP is expected to be at 4.4% in Georgia with a decrease to 20% in 2021, while the current account surplus to GDP is forecast at 4.4% in Azerbaijan with an increase to 6.3%. in 2021
The trade balance in Armenia, according to ADB forecasts, will be negative in 2020 at the level of $ 2.125 billion, with an increase to $ 2.183 billion in 2021. In neighboring Georgia, a negative level of this indicator is also expected - $ 5.252 billion in 2020 with an increase to $ 5.425 billion in 2021. And in Azerbaijan, the trade balance is forecasted at a positive level - $ 4.603 billion in 2020 and $ 5.803 billion in 2021.
Regarding Armenia's foreign trade, ADB expects a slowdown in 2020: for exports up to 2.5% in 2020 with an acceleration of up to 7.5% in 2021, and for imports up to 7.5% in 2020 with the continuation of this trend in 2021 - up to 6.5%. This is due to the fact that the main trade partners of Armenia are likely to be disadvantaged by the latest developments in the global economy (the spread of COVID 19 and a sharp decline in world oil prices), which poses a threat to Armenia's economic prospects (GDP growth according to ADB forecast up to 2.2% in 2020).
It should be noted that according to the March forecast of the Central Bank of Armenia, the ratio of the current account deficit to GDP will be located in the range of 7-9% in 2020. The Central Bank also predicted a significant reduction in the money transfers of individuals in 2020 by 16-19% (against the actual 9.7% increase in the inflow of transfers in 2019, moreover, from Russia - with the trend coming out of the recession by 0.6% growth), due to the slowdown in the Russian economy and a significant devaluation of the ruble in the face of a sharp decline in oil prices. In parallel, a temporary ban on entry into the country, introduced by Russia as part of measures to prevent the spread of the coronavirus pandemic, will have a significant impact on the decline in remittances. It is worth noting that, according to the Central Bank of the Republic of Armenia, in 2019 the share of Russia in the structure of the inflow of transfers of individuals decreased from 59% to 54%. The Central Bank predicts that the impact of coronavirus on the economy will slow down Armenia's GDP growth in 2020 to a stagnant 0.7% (from the actual 7.6% growth in 2019), but growth is expected to recover to 20% in 2021.
