ArmInfo. Beata Javorcik, Chief Economist at the European Bank for Reconstruction and Development (EBRD), clarified what caused the "optimism" of the EBRD, which in its latest report forecasted a 6.2% growth of the Armenian economy, answering a question from an ArmInfo correspondent.
Thus, the Bank's expectations for Armenia's GDP growth exceeded the expectations of other international financial institutions.
Notably, the EBRD in its latest Regional Economic Prospects. Taming inflation report, published on May 15, improved the forecast for Armenia's GDP growth for 2024 from the previous 4.5% to an updated 6.2% (against the actual 8.7% growth in 2023), expecting a slowdown to 4.8% in 2025. Meanwhile, in their April reports, both the IMF and the World Bank improved the forecast for Armenia's GDP growth for 2024 to 6% and 5.5%, respectively. At the same time, both the IMF and the World Bank expect Armenia's GDP growth to slow to 5.2% and 4.9% in 2025, respectively. The Asian Development Bank forecasts 5.7% economic growth for Armenia in 2024, with the rate accelerating to 6% in 2025. The forecasts of international rating agencies for Armenia's GDP growth for 2024 are as follows: S&P Global Ratings expects the pace to slow down to 6.2%, and Fitch Ratings - to 6%. The Eurasian Development Bank forecasts Armenia's GDP growth by 5.7% for 2024. The Central Bank, having switched to a new monetary policy development system (FPAS MARK II), from 2024 began to calculate the GDP forecast for several scenarios and indicate the expected growth not at one specific level, but in a range. In particular, according to the forecast of the Central Bank of Armenia, GDP growth in 2024 will be in the range of 5.3-6.4%.
"The countries of the region, including Armenia, recorded a significant inflow of funds in 2022 due to the relocation of citizens and businesses; Many of the immigrants were highly qualified IT specialists," Beata Javorcik said on May 16 at a press conference following the 33rd Annual Meeting of the Bank in Yerevan. According to her, this influx of citizens was equal to 2.5 percent of the population of Armenia, and the number of employees in the IT sector doubled in 2022.
"That bears fruit in the form of dividends; services are exported, including in the IT sector, which has a positive impact on the foreign trade balance and the current account deficit, which is structural for Armenia, reaches 2% as a result," she noted.
In addition, according to the EBRD's chief economist, the spending of funds by the Armenian government on the integration of refugees from Nagorno Karabakh has also stimulated economic activity. "We expect that it will also affect the economy in the future," she said
In the medium term, Armenia can play the role of a bridge country, which can become a channel of trade between those blocs that are rapidly emerging in the international economy. As for the slowdown in China's economy, which could also affect the situation in region, then, according to Beata Javorcik, nevertheless, it is still growing at 5%. In this sense, this cannot somehow affect the growth rates of the Armenian economy and forecasts. When asked what the further deterioration of Armenian-Russian relations means for the Armenian economy and how, in a worst-case scenario, possible trade restrictions will affect it, the EBRD chief economist said that although the Russian market is important for the Republic of Armenia, Armenian goods are no less important for Russia.
