Official sources of Armenia`s partner countries predict a decline in  their GDP in 2020 in the range of 4.5- 7.9%

ArmInfo. Official sources of world leaders - the main partner countries of Armenia predict a decline in their GDP in 2020: in the USA - by 5.3%, in the Eurozone -  by 7.9%, in the Russian Federation - by 4.5%. These fresh economic  forecasts of the partner countries are cited by the Central Bank of  the Republic of Armenia in the Monetary Policy Program (MP) for the  third quarter, published on September 30, in which the forecast for  Armenia's GDP for 2020 was adjusted towards a larger decline - by  6.2% (against the previous 4% and an actual 7.6% growth in 2019), the  unemployment rate is expected to grow to 20.2% (from an actual 18.9%  in 2019), and inflation at the end of 2020 will be 2.5% (against the  target 4% +/- 1.5).

According to estimates by the Bureau of Economic Analysis (BEA) of  the US Department of Commerce, in the second quarter of 2020, the  economic decline was 9.5% per annum. The bureau notes that, despite  the measures taken by the US government, all sectors of the economy  were in decline, which was accompanied by a significant reduction in  private demand, namely private consumption - by 10.1% and private  investment - by 8.5%. In the II quarter of this year. the  unemployment rate rose sharply to 13% from 3.8% in the first quarter.  The bureau emphasizes that in the III quarter there is a slight  recovery in economic activity, and a decrease in the unemployment  rate in July to 10.2%. In the context of restrained private  consumption and its slow recovery, the US economy will decline by  5.3% in 2020. The US Federal Reserve System kept the base rate in the  second quarter at the rate set from March 16 of this year. the range  of 0- 0.25% (this is the historical minimum of this indicator, the  last time it was the same in 2015 - Ed.), and also announced the  continuation of the volumetric quantitative easing program. These  measures were aimed at satisfying the high demand for liquidity from  the financial markets, which arose due to the growing economic  uncertainty amid the coronavirus pandemic. Despite some recovery in  energy prices, it is predicted that the current weak demand will  further contribute to maintaining a low inflationary environment. In  these conditions, as well as in order to stimulate economic activity  and employment in the labor market, the US Federal Reserve, within  the framework of the new monetary strategy announced in August, will  continue to pursue a policy of low rates in the longer term.

According to preliminary estimates of Eurostat, in the second quarter  of 2020, the economic decline in the Eurozone amounted to 15% per  annum, which was reflected by a significant reduction in foreign  trade, private consumption and investment. Short-term key indicators  show some economic revival in the third quarter, mainly due to the  positive impact from the mitigation of restrictive measures imposed  earlier due to the outbreak of the coronavirus pandemic.  Nevertheless, in the face of uncertainty about the duration of the  epidemic, in some countries of the Eurozone, the risks of a deep  economic recession and a slow recovery remain. Thus, in the Eurozone  economy, a 7.9% decline is forecasted for 2020. The unemployment rate  in the Eurozone increased in the II quarter from 7.3% to 7.7%. The  average inflation rate in the second quarter was 0.3% y / y, being  well below the target level, while real inflation in the reporting  quarter was 1.1% y / y. The ECB announced that, amid expected low  inflation and economic downturn, it will continue to pursue a policy  of low rates, keeping the base rate at negative levels, and implement  the previously launched asset repurchase program (APP) at the same  pace - at 20 billion euros per month.

According to preliminary estimates of Rosstat (Federal State  Statistics Service of the Russian Federation), in the second quarter  of 2020, the decline in the Russian economy amounted to 8.5% per  annum, mainly due to a delay in private spending and a reduction in  the volume of services. The unemployment rate in Russia increased in  the II quarter from 4.6% to 6%. Trends in economic activity recovery  are observed in the third quarter, despite the persistence of risks  of slowdown in growth emanating from the global economy. For 2020,  Russia's GDP is projected to decline by 4.5%. Inflation in the second  quarter rose to 3.1% y / y from 2.4% in the first quarter,  nevertheless being below the target of 4%. This is the rise in  inflation, mainly due to the rise in prices for seasonal food  products and the devaluation of the Russian ruble. Given the  uncertainty due to the coronavirus pandemic and the persistence of  deflationary risks under the influence of weak demand, the Central  Bank of the Russian Federation lowered the refinancing rate by 1.5  percentage points in Q2, with a subsequent decrease by another 0.25%  in July - to 4.25%, intending and maintain the stimulating effect of  monetary conditions in the forecast horizon.  Note that the June  forecasts of the World Bank on country GDP for 2020 are worsened  towards a greater decline: Armenia - minus 2.8%, Russia - minus 6%,  the United States - minus 6.1%, Eurozone - minus 9.1%, the world  economy- minus 5.2%. And the IMF in its June forecast predicted a  decline in the world economy by 4.9% for 2020, GDP in the Eurozone -  by 10.2%, the US economy - by 8%, Russia's GDP - by 6.6%, but for  Armenia in this report no forecasts were provided. However, the  deterioration by the International Monetary Fund of the estimates of  the fall in the world economy and Russia's GDP in 2020 already  increases the likelihood of a deepening negative forecast for  Armenia's GDP (from a 1.5% decline according to the April forecast of  the IMF - Ed.).