ArmInfo. The European Bank for Reconstruction and Developmemnt (EBRD) has improved the GDP growth forecast from 4% to 5%, with the same GDP growth rate expected in 2024 (against the previously forecast 4.8%), according to the EBRD Regional Economic Prospects in the EBRD Regions. High inflation weighs on purchasing power of households."
In Armenia, economic growth reached 14.2 per cent in 2022. The manufacturing sector recorded growth of 7.8 per cent and services increased by 28.2 per cent, with construction and trade growth in double digits. The services sector benefitted from the exceptional increase in non-resident demand, especially for information, communication and tourism-related services. At the same time, the net inflow of money transfers nearly doubled in 2022 due to an almost seven-fold increase in transfers from Russian citizens who found a refuge in Armenia, including many of Armenian origin. As a result, economic growth in the first three months of 2023 stood at 12.2 per cent year-on-year, but signs of a slowdown are emerging. Annual inflation subsided to 5.4 per cent in March 2023 reflecting monetary tightening and exchange rate appreciation during 2022. GDP growth of 5.0 per cent is expected in both 2023 and 2024, subject to major geopolitical downside risks.
This March, Armenia's Central Bank improved its forecast for Armenia from 4.9% to 5.8%, followed by an improved IMF forecast this April, 4.5% to 5.5%.
Growth is also expected to decelerate in the Caucasus as the extraordinary factors that boosted economic activity in 2022 provide limited additional stimulus. The region is forecast to grow by 3.5 per cent in 2023 and 3.7 per cent in 2024.
