ArmInfo. In 2020, the Armenian economy sagged significantly due to the military conflict in Karabakh, as a result, the pace of recovery will not be very fast.
Yevgeny Vinokurov, Chief Economist of the Eurasian Development Bank (EDB) and the Eurasian Fund for Stabilization and Development (EFSD), announced this at the site of the Department of World Economy of the National Research University Higher School of Economics, presenting the presentation "Medium-Term Prospects for Economic Growth of the EAEU Countries"
In particular, at the end of 2021, the expert predicts for Armenia, an average growth of 3.8%, according to the baseline scenario, which will accelerate in the next 5 years, reaching an average level exceeding 5%, averaging 5.8%.
He noted that during the first decade of the 21st century Armenia grew really very quickly, which was influenced by several factors. Vinokurov explained that Armenia has a traditionally good situation with attracting foreign investments into the economy through the efforts of the Diaspora. "This is a channel that really works," the economist stressed.
And from the point of view of the cost of state borrowing, in his words, in all the metrics Armenia's indicator is much lower than it should have been in comparison with comparable economies. <However, Armenia always attracts better. A month and a half ago, it managed to raise $ 750 million on the international market, with a maturity of 10 years, at 3.8%. This is an excellent resource cost, "added Vinokurov. He explained that this is a consequence of the openness of the economy, its efforts aimed at external vectors. In this regard, the expert recalled that in addition to membership in the EAEU, Armenia has an association with the EU, to which can be added the immersion of the Diaspora in the development of the economy, the factor of remittances, the share of which averages 13-18% per year in the structure of GDP.
The economist noted that when making a forecast for the baseline scenario in 2021 of the recovery growth of the EAEU countries, which is taking place against the background of the attenuation of the pandemic, he is guided, first of all, by the fact that the restrictions will be lifted during the summer. <In the baseline scenario, we do not take into account a full-fledged third wave, except for some local bursts. I can be accused of duty optimism. But I see a lot of systemic risks to economic growth for our region, but they shift to the second half of the 2020s, "he said.
One of these risks, the expert called the high level of public debt of the EAEU countries, except for Kazakhstan and Russia, which had to significantly increase debts as part of action-oriented measures and support the economy, but they are still far from the limit. But the economies of Armenia, Kyrgyzstan and Belarus are approaching the red line. And here, in his opinion, governments should conduct a cautious policy, despite the fact that the structure and burden of debt for each of these countries is different. Speaking about inflation in the EAEU, Vinokurov noted that the exhaustion of exchange rate shocks and a jump in food prices will lead to a slowdown in inflation in the second half of 2021. Accordingly, inflation for 2022-2026 is projected to be within the target. "Although one should always bear in mind the geopolitical risks that may cause some jumps in inflation and currency devaluation," he noted. In particular, for Armenia, as the expert further noted, in 2021 the inflation forecast will be 4.8%, in the context of 2022- 2026 - 3.5%.
To note, according to the new forecast of the Central Bank of Armenia, a lower GDP growth is expected in 2021 - by 1.4%, instead of the previously expected 2% (against the actual decline in GDP in 2020 by 7.6%). According to the January forecast of the World Bank, GDP growth in Armenia in 2021 will amount to 3.1%. The state budget of Armenia for 2021 provides for a GDP growth of 3.2%.