EBRD Raises Growth Forecast for Armenia’s Economy for 2022

• 09.28.2022, 16:14
•  World,  Armenia

The European Bank for Reconstruction and Development (EBRD) has revised its growth forecast for the economy of Armenia. The Bank is now forecasting 8% economic growth for Armenia in 2022.

In its latest Regional Economic Prospects (REP), the EBRD said that the economies of Armenia, Azerbaijan and Georgia are enjoying some of their highest growth rates in years.

The EBRD said Armenia and Georgia are benefiting from an inflow of Russian businesses and information and communication technology (ICT) professionals, boosting the service sectors of these small economies.

However, the robust growth recorded for the region in 2022 will taper off in 2023, highlighting concerns about its medium-term sustainability. The report warns that current growth in the Caucasus is mainly driven by temporary factors that could easily be reversed.

“In Armenia, the solid recovery seen in 2021 carried strong growth momentum into 2022, with economic growth reaching 13.1 per cent in the period from January to July. As in Georgia, the arrival of many people and firms from Russia led to an increase of 113 per cent in foreign inflows and boosted demand for services.

This has helped Armenia to finance its widening trade deficit. Foreign reserves have also increased by 20 per cent and the exchange rate by 18 per cent. The report forecasts robust growth of 8 per cent in 2022, up from a previous estimate of 4.5 per cent. The slowdown is expected to be less gentle, with a drop to 4 per cent likely in 2023. However, the latest growth estimate for 2023 remains above the earlier projection of 2.5 per cent”, the Bank said.