ArmInfo.Average y-o-y official inflation will increase to 6.8% in 2021 from 1.2% in 2020, but in the next two years this figure will decrease to 4.6% in 2023. Real inflation will also increase - to 7.4% in 2021 from 1.3% in 2020, in the next two years it will decline and in 2023 will drop to 4.5%. These are the new forecasted figures of the Central Bank of Armenia.
Meanwhile, the Central Bank also expects slightly adjusted indicators of economic growth. Thus, by the end of 2021, the country's real GDP will amount to 4.6%, against a 7.4% decline in 2020, and in absolute terms will reach 6.8 trillion drams, with a subsequent y-o-y growth to 7.8 trillion drams by 2023. Moreover, this year the highest growth rates will be shown in the service sector - 6.1% and the industrial sector - 4.5%. Comparatively moderate growth is expected in the agricultural sector - 2.3%, in the construction sector - only 0.2%.
Against the background of the growth of the industry dynamics and the continued upward trend in the next two years, tax collections, after a 10% decline in 2020, will increase by 3.4% in 2021 and will maintain the same growth rate in 2023.
Public consumption will worsen the dynamics in 2021 to a 10.9% decline from 15.6% growth in 2020, having a weak 1.2-1.5% growth in the next two years. Private consumption, on the other hand, will change from a 14% decline in 2020 by 4.5% growth in 2021, with a slowdown to 1.2% in 2022. By 2023, the Central Bank expects this indicator to accelerate to 4.6%.
Government investments, after growing by 15.6% in 2020, will decrease by 9.1% in 2021, with a release in the next two years to a weak upward trend in the range of 2.5-1.4%.
For the export of goods and services, the Central Bank of the Republic of Armenia forecasts a growth of 7.7% for 2021 with an acceleration in 2023 to 12%, and for imports - an increase of 6.2% in 2021 with an acceleration in 2023 to 10.9%.
The trade deficit in 2021 will decrease to 8.4% of GDP from 9.3% in 2020, the current account deficit - to 1.6% of GDP from 3.1% in 2020, and the surplus of the balance of services will increase to 2% of GDP from 1.2 % in 2020 In the context of the next two years, in 2022-2023, the indicators of the trade balance and current account deficit will increase to 8.5% and 4.1% of GDP, respectively, and the surplus of the balance of services will decrease to 1.6-1.7% of GDP.
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%. It should be reminded that according to the data of the RA State Statistical Committee, Armenia's GDP decreased by 7.4% to 6.2 trillion drams in 2020. 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%. The decline was also observed in exports by 3.9% and imports by 17.7%.
Already in H1 2021, economic activity in Armenia showed an increase of 5% per annum, mainly due to the construction sector (10.8%), the trade sector (8%) and the agricultural sector (6.8%), as well as the service sector (2.7%) and the industrial sector (2.1%). Exports went up by 23.3% per annum, while imports grew by 7.9%.
