ArmInfo. The economy cannot grow above its potential for a long time. This was stated on November 1 by Chairman of the Central Bank of Armenia Martin Galstyan, answering a question from an ArmInfo correspondent during the press conference regarding the next increase of the refinancing rate (from 10% to 10.5%).
He noted that the Central Bank's forecast for economic growth is cumulative and is not based on indicators, but on a scenario and certain logic. In particular, the head of the Central Bank noted that it is not the first year that the estimates of the government and the Regulator on economic growth differ (, according to the draft state budget for 2023, GDP growth will be 7%, according to the forecast of the Central Bank - 4.5%). In this regard, he added that the Central Bank assessed risk management systems, and the result of conservative observations brought the Armenian economy to 4.5% growth in 2023, which, according to Galstyan, is a fairly good indicator.
"The issue is that in parallel with the forecast, we have stated many times that a significant part of the growth is driven by demand. That is, imagine that the country has a growth potential that is significantly exceeded this year. According to our forecasts, the economy cannot develop beyond its potential for a long time, because this is a natural process, and after some time it will return to the limits of its potential," he explained.
In their October forecast, the World Bank (WB) and the International Monetary Fund (IMF) indicated a slowdown in Armenia's GDP growth in 2023 to 4.3% and 3.5%, respectively (from an estimated 7% growth expected by both the WB and the IMF in 2022). And according to the September forecast of the Central Bank of the Republic of Armenia, GDP growth in 2022 will be 12.9%, with a slowdown in 2023 to 4.5%. In November, the Central Bank is planning another update of forecasts and, in all likelihood, expectations for GDP growth for 2022 will be adjusted, taking into account new factors that have not been taken into account in the September forecast report.
It should be noted that according to statistical data for January-September 2022, economic activity in Armenia increased by 14.1% per annum and the growth drivers were the service sector - by 27.1%, the energy complex - by 16.9%, the trade sector - 14.5% , the construction sector - by 14.3%, the industrial sector - by 10%. And only the agricultural sector lingered in the decline with a slowdown to 0.7%. In parallel with this, the volume of foreign trade turnover increased significantly - by 62.5%, due to the impressive growth of both exports by 63.8% and imports by 61.6%.
