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.).