IMF gives forecast of Armenia`s key indicators for 2021 - 2022

ArmInfo. Armenia's gross external debt, which already in 2020 exceeded GDP to 103.5%, will continue to prevail over GDP both in 2021 (107%) and in 2021 (105.1%).  Thus, the gross debt of the Armenian government will reach 69.9% of GDP in 2021  (from 62.8% of GDP in 2020), and then in 2022 it will modestly  decrease to 68.8% of GDP. This is stated in the new IMF report  "Regional Economic Outlook Update: Middle East and Central Asia",  which presents a detailed forecast of key indicators of Armenia.

Thus, the IMF forecasts GDP growth in Armenia in 2021 by 1% to $ 12.3  billion (against the actual 7.6% decline in 2020 to $ 12.3 billion),  with an acceleration in 2022 to 3.5% to reach $ 13 billion.  Consumer  price inflation in Armenia is predicted by the IMF for 2021 at an  average of 3.9%, and for 2022 - at 3.2%, against the actual 1.2% in  2020 (January-December versus January-December 2019). And the core  consumer price inflation, according to the IMF, will rise from the  actual 1.3% in 2020 to 3.7% in 2021, but then drop to 2% in 2022.

Money supply growth will slow down from 11.5% in 2020 to 8.1% in  2021, followed by a slowdown to 6.6% in 2022.

The ratio of government loans / borrowing will be minus 5.4% of GDP  in 2021, and in 2022 it will decrease to minus 2.6% of GDP, against  higher minus 6.9% of GDP in 2020.  The deficit of the state budget of  Armenia in 2021 will be 5.4% of GDP, with a subsequent decrease in  2022 to 2.6% of GDP, against 6.9% of GDP in 2020.  State revenues  (excluding subsidies) will amount to 23.2% of GDP in 2021, against a  similar 23.3% of GDP in 2020, and in 2022 will increase to 24.2% of  GDP.

The volume of exports of goods and services from $ 3.7 billion in  2020 will reach $ 4.1 billion in 2021, with a further increase in  2022 to $ 4.8 billion. The volume of imports of goods and services  from $ 5 billion in 2020 will reach $ 5.6 billion in 2021, with a  further increase in 2022 to $ 6.4 billion. The current account  deficit will increase from $ 0.6 billion in 2020 to $ 0.8 billion in  2021, and will continue to grow in 2022 to $ 0.9 billion. The current  account deficit to GDP ratio will increase from 4.6% in 2020 to 6.7%  in 2021, and will decrease in 2022 only up to 6.6%.

Armenia's gross international reserves will rise from $ 2.6 billion  in 2020 to $ 2.8 billion in 2021 and will remain at this level in  2022. The degree of coverage of imports by international reserves  (sufficiency of international reserves to cover imports), after a  decrease from 6.8 months in 2019 to 5.6 months in 2020, will continue  to decline in the next two years - in 2021 to 5.2 months and in 2022  to 4.7 months.

To note, according to the World Bank's forecast, GDP growth in  Armenia in 2021 year will be 3.4%, with an acceleration in 2022 to  4.3%. Inflation in Armenia, the World Bank predicts for 2021 at the  level of 3.5% with some increase in 2022 to 3.8% (against actual  inflation of 3.7% in January-December 2020, with an annual inflation  rate of 1.2%). The WB also predicts an 8.7% growth in exports of  goods and services from Armenia for 2021, accelerating to 12.2% in  2022, and imports will accelerate from 8.3% in 2021 to 9.2% in 2022.  The WB forecast current account deficit in Armenia at 4.8% of GDP in  2021 with an increase to 5.5% of GDP in 2022.

On the state debt of Armenia, the World Bank predicts growth to 70.8%  of GDP in 2021, with a slight decrease in 2022 to 70.6% of GDP. The  ratio of the state budget deficit to GDP, according to the WB  forecast, will be 5.3% in 2021, with a decrease in 2022 to 3.8%.  According to the forecast of the Central Bank of Armenia for 2021,  GDP growth will be 1.4%, export growth - 1-3%, import decline - 2-4%,  the ratio of current account deficit to GDP will be within 2-4%, and  the ratio of the state budget deficit to GDP will be 5.3%. The RA  state budget for 2021 is based on GDP growth of 3.2% and inflation at  the level of 4% (+/- 1.5).