Wednesday, September 30 2020 21:25
Karine Melikyan

CBA downgraded the forecast for exports and imports for 2020 to an  equably significant decline of 29-32%

CBA downgraded the forecast for exports and imports for 2020 to an  equably significant decline of 29-32%

ArmInfo. Central Bank of Armenia revised the forecast for 2020 on foreign trade towards a larger decline, expecting an equably significant decline in volumes  of export and import by 29-32%. This is stated in the monetary policy  program of the Central Bank for Q3 of 2020 published on September 30,  in which the forecast for a decline in GDP in 2020 was worsened to  6.2% from the previously forecasted 4%.

This is due to the delay in the recovery of the global and domestic  economy, i.e. very weak-than-expected signs of growth, a suspension  of tourist traffic due to restrictive measures against the backdrop  of the coronavirus pandemic, and an increase in additional costs when  opening international routes.

In terms of the current account deficit to GDP ratio, the Central  Bank has improved its forecast for 2020 to a range of 5-6%.

Central Bank forecasts for the medium term foreshadow that a weaker  than expected recovery of the global and domestic economy will affect  the growth rate of foreign trade, i.e. the upward trend in exports  and imports will be slower than previous expectations. In the  mid-term, according to the new forecast of the Central Bank of  Armenia, the current account deficit / GDP ratio will approach the  balanced level in the range of 3-5%. To recall, in the previous  (June) forecast, the CBA for 2020 expected a more moderate decline in  both imports by 15-17% (against the actual growth in 2019 by 9.1%),  and in exports - by 12-15% (against actual growth in 2019 by 10.3%).  In these conditions, the Central Bank of Armenia expected that the  ratio of the current account deficit to GDP would be placed in the  range of 6-7% in 2020, and in the medium term - a gradual approach to  the balanced level in the range of 3-5%.

Note that, according to the RA Statistical Committee, Armenia's  foreign trade turnover in January-August 2020 decreased by 10.2% per  annum - to $ 4.4 billion, in particular, the volume of exports  dropped by 6% - to $ 1.6 billion, while imports fell by 12.4% - to $  2.8 billion. In August 2020, compared to August 2019, a 4% decrease  in foreign trade turnover was provoked by an almost equal decline in  exports and imports - by 3.8% and 4.1%, respectively. This situation  was recorded with a decline in economic activity in January- August  2020 by 6.4% per annum, and in August 2020 to August 2019, the  decline in this indicator turned out to be more - 9.8%. A year  earlier, during the same periods, the dynamics of foreign trade was  upward, and the growth of exports significantly prevailed over the  growth of imports, and this was observed against the background of an  increase in economic activity both in January-August and in August -  by 7% and 7.6% y-o-y. 


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