ArmInfo. By next 2025, the Eurasian Development Bank (EDB) predicts a decrease in Armenia's GDP growth rate to 5% due to the absence of any other impulses that could accelerate economic growth. Anton Dolgovechny, senior analyst at the Country Analysis Center of the EDB Analytical Directorate, stated this at the online presentation of the analytical report "Macroeconomic Forecast 2024- 2026".
He emphasized that the current high growth of Armenia's GDP is largely due to the increase in the production of gold products. In January-April the increase was 4.5 - 4.6 times. Accordingly, this boosted industrial growth, as well as GDP growth. "According to our estimates, this is about 40% of the increase in business activity in January-April, that is, a lot," the analyst noted. Dolgovechny expressed his belief that the influence of this factor will be exhausted by the end of the current 2024 and, accordingly, in 2025 there will be no more such additional impulse.
'In addition, in our baseline forecast we assume a slowdown in growth among Armenia's main trading partners. This will certainly lead to a decrease in the rate of remittance receipts and, accordingly, will cool domestic demand. "Since today we do not have additional information about any other impulses that could accelerate economic growth, in this regard we assume a return of the economy to balanced growth rates, that is, at the level of 5%," he emphasized.
According to the Bank's Forecast, Armenia's GDP growth in 2024 will be 7.5%, the inflation rate will drop to 1.5%, and the average annual dollar exchange rate will be 396 drams. In 2025, the country's GDP growth will decrease to 4.2%, and in 2026 it will increase to 4.9%. The inflation forecast for next year was 2.5%, and in 2026 - 2%. The average annual exchange rate of the dram to the US dollar is projected at 398 drams, and in 2026 - at around 399 drams. According to the bank's analysts, the average annual rate on interbank loans (IBC) in Armenia in 2024 will be 8.3%, and then go down and in 2025 it will be at the level of 6.7%, and in 2026 it will drop to 6.0%.
Bank analysts identified possible risks for the Armenian economy, which were briefly mentioned by Anton Dolgovechny. This is a strong concentration of economic growth in several sectors, which creates risks for the sustainability of growth indicators in the base scenario forecast. The high economic growth rates of Armenia in the first half of 2024 are mainly associated with increased production and export of jewelry. If this factor is short-term, the risks of significantly slower economic growth in 2024 compared to the baseline scenario increase.
A significant slowdown in the growth rate of the global economy and in the main trading partner countries. High interest rates in developed countries and structural problems in the Chinese economy could be factors in a significant reduction in consumer and investment activity. The decline in energy demand will also affect the Russian economy. In such conditions, external demand and the level of remittances will decrease for Armenia, and devaluation pressure on the Armenian dram will increase.
The driver of economic growth in Armenia in 2022-2023 may become a risk for the economy. The likelihood of an outflow of capital and labor resources is becoming a significant threat to the economy and the stability of the national currency. The outflow of the net inflow of cross-border remittances will primarily lead to a sharp depreciation of the national currency and a surge in prices.
