Armenia’s economy will likely expand by only 1 percent this year, the government said on Wednesday in what amounted to a substantial downward revision of its earlier growth projections.
Prime Minister Hovik Abrahamian’s cabinet made the forecast in a three-year budgetary spending program which it approved during a weekly session in Yerevan. The 600-page document says nothing about the reasons for the anticipated slowdown in 2015.
“This is strange,” said Babken Tunian, an economic analyst. “There should have been some explanation.”
Abrahamian insisted as recently as in May that economic growth in the country will reach “at least 2-3 percent” in 2015. He said that the government might even succeed in meeting its 4.1 percent growth target that was set late last year.
The World Bank similarly predicted last month that the Armenian economy is on course to grow by 0.8 percent, down from 3.4 percent in 2014. The International Monetary Fund, for its part, said earlier in June that Armenia will likely post zero growth in 2015.
Both the World Bank and the IMF blamed the ongoing recession in Russia for Armenia’s worsening macroeconomic performance. They expect faster growth in the country next year.
The government’s spending program says in this regard that Armenia’s Gross Domestic Product will increase, in real terms, by an average of 3.2 percent annually from 2016-2018. At the same time it says that decreased remittances from Armenians working in Russia will lower consumption levels in the country, resulting in a slight drop in the government’s 2016 tax revenue.