Tuesday, June 15 2021 19:18

ArmInfo.The Central Bank of Armenia improved its forecast for GDP growth for 2021 to 4.6% (from the previously projected 1.4%). This was announced on June 15 at a  press conference timed to increase the refinancing rate from 6% to  6.5%, Central Bank Chairman Martin Galstyan said.

He noted that the drivers of the projected growth will be the service  sector and the industrial sector, with an increase in growth of 6.1%  and 4.5%, respectively, and to a slightly lesser extent - the  agricultural sector with an acceleration of growth to 2.3%. In the  construction sector, the Central Bank predicts a slowdown in the  decline to 0.2%. M. Galstyan also identified the activation of  tourism among the factors pushing the GDP to higher growth.

When asked by ArmInfo about the forecast of remittances of  individuals, the chief banker replied that the growth range for 2021  has been revised from the previous 7-9% to the updated 15-17%. At the  same time, drawing attention to the very high growth in the inflow of  private transfers from the United States, he said that the previous  growth rates of the inflow of remittances from Russia will recover  and the preconditions for this are already visible in the current  dynamics.

When asked by ArmInfo about the projected real inflation, M. Galstyan  replied that by the end of 2021 (December against December 2020) the  level will increase to 7% from 3.6% in 2020. He explained that growth  will be observed in the short term, and in the medium term, inflation  will correct near the target threshold of 4% (+/- 1.5). At the same  time, he noted that in May 2021 compared to May 2020, real inflation  reached 7.4% with official inflation of 5.9%, against 0.9% and 1.2%,  respectively, a year earlier.

To note, according to the updated forecast of the World Bank, GDP  growth in Armenia in 2021 will be 3.4%, accelerating to 4.3% in 2022  and 5.3% in 2023. Moreover, in the sectoral breakdown, the WB expects  accelerated growth in 2021-2022 in the agricultural sector - from  1.3% to 2.2%, in the industrial sector - from 1.2% to 2.4%, in the  service sector - from 5.1% to 5.8%. The World Bank predicts inflation  in Armenia at 3.5% in 2021 with a slight increase in 2022 to 3.8%. In  Russia, the WB forecasts GDP growth of 3.2% for 2021, maintaining  this rate in 2022 and a subsequent slowdown in 2023 to 2.3%. For the  US economy, the World Bank predicts growth by 6.8% for 2021 with a  slowdown to 4.2% in 2022 and 2.3% in 2023.

It should be reminded that according to the data of the RA  Statistical Committee, the decline in Armenia's GDP in 2020 amounted  to 7.4%. In particular, the decline in the service sector was 14.7%,  the trade sector - 14%, the construction sector - 9.5%, the  industrial sector - 0.9%, and the growth of the agricultural sector  was 1.4%. Official inflation in January-December 2020 amounted to  3.7%, against inflationary 0.7% in January-December 2019.

According to the Central Bank of Armenia, the net inflow of transfers  from individuals grew in January- April 2021 by 80% per annum (from a  19% decline a year earlier), which was largely supported by a multi-  fold increase in remittances from the United States, with a moderate  increase in transfers from Russia ... In total, the inflow of  transfers from individuals to Armenia turned the annual dynamics in  January-April 2021 towards 29.1% growth, amounting to $ 573.5  million. A similar improvement in the trend was observed in the  outflow of transfers - a reversal towards 12% growth, with a volume  of $ 370.3 million. In the inflow, the share of Russia, despite the  decline, continues to dominate at 38% (January-April 2021), while  increasing in outflow to 32.7%, while the share of the United States  in inflow and outflow increased to 29% and 15.4%, respectively.