ArmInfo. The Central Bank of Armenia improved its forecast for GDP growth for 2022 from the previous 1.6% to the updated 4.9%, noting that in the absence of an actual inflow of international visitors, Armenia's GDP growth estimate for 2022 would be lower - 3.6%. This is noted in the Monetary Policy Program (MPP) of the Central Bank for Q2 2022, published at the end of June.
In sectoral terms, the Central Bank forecasts an acceleration in construction to 8.9% (from 3.1% in 2021) and a slight slowdown in services to 7.5% (from 7.9% in 2021). According to the Central Bank's expectations, the dynamics of the agricultural sector will also improve, from a 0.6% decline in 2021 to a 2.7% growth in 2022. At the same time, the dynamics of industrial production, on the contrary, will worsen - from a 3.5% growth in 2021 to a 1% decline in 2022. Against this background, in 2022 the growth of tax collections will slow down to 4% from 7.4% in 2021.
The growth of gross fixed capital formation will accelerate in 2022 to 17.5% from 6.3% in 2021. In particular, a slight acceleration in the growth of gross fixed capital formation in the private sector is forecasted - up to 14.1% from 11.2% in 2021, while public investment will jump by 31.5% in 2022 (overcoming 9.5% recession in 2021). At the same time, government consumption in 2022 will drop by 6.8% (from 8.4% growth in 2021), while real consumption growth in the private sector accelerates from 3.4% to 5.9%.
Citizens of Russia, Belarus and Ukraine registered more than 1,000 individual entrepreneurs in the state register of Armenia in March, plus about 300 individual entrepreneurs in April. These are just IT sector statistics. As a result, the volumes in the field of information and communications increased sharply in March over April by almost 35% y / y - up to 33.1 billion drams, a comparison of which with the number of newly established IPs by non-residents shows that such an increase in volumes was mainly due to the inflow of foreign capital and labor migrants.
A large influx of international visitors and foreign capital to Armenia has been observed since March 2022, which is associated with the arrival of a huge number of labor migrants from Russia, whose work there has become more difficult due to anti-Russian sanctions against the background of the Russian-Ukrainian confrontation. According to the studies of the Central Bank, the growth in the inflow of international visitors and capital observed during this period was mainly due to an increase in external demand, which was reflected in a significant acceleration in the export of services from Armenia. This is evidenced by the official statistical data on international tourism, according to which the share of Russian citizens among tourists visiting Armenia increased in the first quarter of this yearup to 43.7% from 34.9% a year earlier.
Strong external demand is also evidenced by a jump in the volume of some services provided, as well as a sharp acceleration of inflation in segments of the service sector, which are characterized by rather sharp prices. For example, in the field of accommodation and catering, the volume of services provided in March- April significantly exceeded not only the indicator of a year ago, but also the pre-crisis level.
With the arrival of international visitors, a sharp increase in financial services was noted, as evidenced by a noticeable increase in non-deposit accounts of non-resident individuals in Armenian banks in March-April. Thus, this year, from March to April inclusive, non-resident individuals opened 3.9 thousand deposit accounts and 33.3 thousand settlement accounts in Armenian banks, against 3.5 thousand and 12.7 thousand respectively in February. According to the new forecast of the Central Bank, official inflation in Armenia by the end of 2022 will be 8.5%, and core inflation - 8%, against 7.7% and 7.2% in 2021, respectively, which significantly exceeds not only the indicators of the Corona crisis in 2020 ( respectively 3.7% and 1.3%), but also the pre-crisis meager inflation levels of 0.7% (official) and 1.2% (core).
The forecast report of the Central Bank of the Republic of Armenia also provides expectations for the economies and inflation of the United States, the Eurozone and Russia for 2022. Thus, the growth of the US economy will slow down to 1.7% (from 5.8% in 2021), the Eurozone economy from 5.4% to 3%, and Russia's GDP will decrease by 7.4% (against 4.7% growth in 2021). Inflation in the US will accelerate in 2022 from 4.7% to 8.5%, in the Eurozone - from 2.6% to 7.6%, in Russia - from 6.7% to 15.1%.
The price of oil will rise in 2022 to $103.3 per barrel (from $71 in 2021), copper - to $10214.2 per ton (from $9314.7 in 2021). The FAO index, which jumped from 98 to 125.7 in 2021, will continue to rise to 157.5 in 2022, after which y-o-y growth is expected to slow to 169.7 in 2025.
It should be noted that the World Bank revised its forecast for 2022 in early June, improving the expected GDP growth rate in Armenia from the previous 1.2% to the updated 3.5%. In the middle of June of this year, the Central Bank of Armenia also revised its forecast for 2022, indicating a more optimistic GDP growth of 4.9% (against the previously forecasted 1.6%). According to actual statistics, Armenia's GDP in 2021 reached a 5.7% growth (from a 7.2% decline in 2020), while in pre-Covid 2019, growth of 7.6% was recorded.
