ArmInfo.The World Bank has not changed its GDP growth forecast for Armenia for 2021-2022 - 6.1% down to 4.8%, with a further upward trend to 5.4%, according to the WB January 22 Global Economic Prospects.
Output in Europe and Central Asia (ECA) is estimated to have expanded by 5.8 percent in 2021, reflecting a rebound in domestic demand and positive spillovers from firming activity in the euro area. Growth is forecast to slow to 3 percent in 2022, as domestic demand stabilizes, and 2.9 percent in 2023, as external demand plateaus and commodity prices soften. The near-term outlook is weaker than previously projected, owing to recurrent COVID-19 flareups, a faster-than-expected withdrawal of macroeconomic policy support, and sharp increases in policy uncertainty and geopolitical tensions. The pace of growth over the forecast horizon will leave output slightly lower than its pre-pandemic trend by 2023, and the catch-up of per capita income growth with advanced economies will be slower during 2021-23 than in the decade before the pandemic. Key risks to the regional outlook include a further resurgence of the pandemic, financial stress, less supportive external conditions than expected, and an additional rise in policy uncertainty or escalation in geopolitical tensions.
Higher GDP growth rates in Georgia
The WB forecasts lower GDP growth rates in Georgia and Azerbaijan. Specifically, 10.5% GDP growth is forecast for 2021, with 5.5%-5% GDP growth expected in 2022-2023. The WB forecasts 5% GDP growth in Azerbaijan in 2021, with 3.1%-2.7% GDP growth expected in 2022 and 2023. In Turkey, 9.5% GDP growth is forecast for 2021, with the expansion is set to decelerate to 2-3 percent in 2022 and 2023. Kazakhstan, Kyrgyzstan only EAEU member-states expected to record higher GDP growth rates The WB forecasts lower GDP growth rates in the other EAEU member-states: Russia 4.1% in 2021, with 2.4% down to 1.8% in 2022 and 2023; Belarus, 1.9% in 2021, with 2.8% in 2022 and 2.3% in 2023; Kazakhstan, 3.5% in 2021, with acceleration to 3.7% to 4.8% in 2022 and 2023; Kyrgyzstan, 2.3% growth in 2021, with acceleration to 4.7% in 2022, and deceleration to 4.3% in 2023.
Slower GDP growth rates in CIS
The WB forecasts slower GDP growth rates in Ukraine, Uzbekistan, Tajikistan. Specifically, 3.4% GDP growth is expected in Ukraine in 2021, with deceleration to 3.2% in 2022 and acceleration to 3.5%. In Moldova, 6.8% growth is forecast for 2021, with deceleration to 3.9% in 2022 and acceleration to 4.4% in 2023. In Uzbekistan, 6.2% GDP growth is forecast for 2021, with deceleration to 5.6% in 2022, and acceleration to 5.8% in 2023. In Tajikistan, 7% GDP growth is forecast for 2021, with deceleration to 5.5% in 2022 and to 4.5% in 2023.
South Caucasus forecasts
In the South Caucasus, growth is projected to moderate to 3.9 percent in 2022 and 3.6 percent in 2023. In Azerbaijan, growth is anticipated to decelerate over the forecast horizon but remain above its 2010-19 average rate, supported by an expansion in non-energy sectors, rising public investment, and stable energy sector growth in line with OPEC+ quotas and higher natural gas production.
Georgia's economy is projected to ease toward its potential growth rate in 2022 and 2023 amid tighter fiscal policy. In Armenia, growth is expected to accelerate in 2023, as robust private consumption and a more stable investment climate support domestic demand and offset the drag from ongoing fiscal consolidation. The forecast is predicated on an easing of geopolitical tensions, limited pandemic-related disruptions supported by progress with vaccinations, and improving consumer and business confidence. Weighing on the outlook are legacy structural issues and weaker oil prices in Azerbaijan, as well as challenges with reform implementation in Armenia.
Pessimistic IMF and CBA forecasts for 2021, optimistic for 2022
Last November, the International Monetary Fund (IMF) revised its 2021 GDP growth forecast for Armenia down to 5.5% (against the previous 6.5%), with expected deceleration to 5.3% in 2022 against the previous 4.8%.
According to the CBA forecast, 4.2% GDP growth was expected in Armenia in 2021 (against the previously forecast 4.5%), with acceleration to 5.2% in 2022. Besides, 3.2% GDP growth was budgeted in 2021, with 7% GDP growth budgeted for 2022, after the actual 7.4% decline in 2020 and 7.6% growth in 2019
