Tuesday, April 28 2020 15:03
Karine Melikyan

IMF forecast: GDP decline and inflation in 2020 will be more  significant in countries neighboring with Armenia

IMF forecast: GDP decline and inflation in 2020 will be more  significant in countries neighboring with Armenia

ArmInfo.According to the IMF forecast, the decline in GDP in 2020 will be more significant in the countries neighboring with Armenia. Namely, in Georgia GDP is  expected to fall by 4%, in Azerbaijan - by 2.2%, in Iran - by 6%, in  Turkey - by 5%. In Armenia, GDP is projected to fall by 1.5%.

This was indicated in the April report of the IMF "Regional Economic   Outlook''.  Regarding inflation, the IMF predicts 0.8% for Armenia  (or 1.5% at the end of the period) for 2020, and higher levels for  its neighboring countries: for Iran - 34.2% (42%), for Turkey - 12%  (12%), in Georgia - 4.6% (3.5%), in Azerbaijan - 3.3% (3.3%).  By the  ratio of the current account deficit to GDP for 2020, the IMF  forecasts 8.6% in Armenia, higher level among neighboring countries  is expected in Georgia - 10.5%, and lower in Azerbaijan - 8.2% and  Iran - 4, 1%.  By the ratio of the state budget deficit to GDP for  2020, the IMF forecasts 5% in Armenia, but in Azerbaijan and Georgia  higher rates are expected - 12.8% and 7.8%, respectively.

"The Caucasus and Central Asia Region (CCA) is seriously affected by  COVID-19 disease and a sharp decline in world oil prices. Priority is  given to measures to combat the pandemic, including by increasing  health care costs, introducing travel and transportation  restrictions, physical distance and, if available, budget support for  vulnerable groups, the unemployed, small and medium enterprises.   Growth forecast for 2020 has changed from positive to close to zero  or negative throughout the region. There is considerable uncertainty  about the duration, depth, and secondary effects of these two shocks,  along with concerns about job cuts, budget and foreign exchange  reserves, debt, financial institutions and the loss of business  environment reform, regional integration, and diversification.  IMF  cooperates with other international and regional financial  organizations in order to quickly provide support, the report states.   For EAEU countries, IMF forecasts for 2020 are also disappointing. 

The largest decline in GDP is expected in Belarus - by 6% and Russia  - by 5.5%, followed by Kyrgyzstan - by 4% and Kazakhstan - by 2.5%,  and the lowest will be in Armenia (1.5%). As expected in 2020,  inflation will be high in Kyrgyzstan - 10.6%, slightly less in  Kazakhstan - 6.9%, and even lower in Belarus - 5.6% and Russia -  3.1%, and again the lowest is forecasted for Armenia (0.8%). Among  the EAEU countries, in terms of the current account deficit to GDP  ratio for 2020, the IMF predicts a high level in Kyrgyzstan - 16.6%,  followed by Armenia (8.6%), and lower levels are expected in  Kazakhstan and Belarus - 6.8% and 2 , 9%, respectively, and in Russia  the current account surplus will be 0.7% of GDP.  For the United  States, IMF forecasts for 2020 are as follows: 5.9% GDP decline, 0.6%  inflation, current account deficit 2.6% of GDP. In the Eurozone, the  IMF expects GDP to fall by 7.5% in 2020, inflation to 0.2%, and a  current account surplus of 2.6% of GDP.  It should be noted that  according to the results of 2019, in Armenia, GDP growth amounted to  7.6%, inflation - 1.4%, state budget deficit - 1% of GDP, and current  account deficit - 8.2% of GDP. In Georgia and Azerbaijan, GDP growth  in 2019 was lower - 5.1% and 2.3%, respectively, and inflation was  higher - 4.9% and 2.6%, respectively.


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