The World Bank has again improved its short-term outlook for Armenia, saying that the Armenian economy will grow by around 4 percent annually in the coming years.
In its latest global economic report released this week, the bank said economic growth in the country was on course to accelerate to 3.7 percent in 2017. It will reach 3.8 percent this year and 4 percent in 2019 and 2020, according to the report.
A similar World Bank report issued in May forecast growth rates of 2.7 percent, 3.1 percent and 3.4 percent for2017, 2018 and 2019 respectively. It cited “the sustained expansion of the tradable sectors and a modest recovery in domestic consumption.”
Faster growth anticipated by the Washington-based institution would still fall short of targets set by the Armenian government. According to the latest government projections, Armenia’s Gross Domestic Product will increase, in real terms, by at least 4.5 percent this year and over 5 percent in 2019.
President Serzh Sarkisian and other senior officials in Yerevan said late last month that the Armenian economy is on track to expand by more than 6 percent in 2017.
Commenting on the differing forecasts, Deputy Finance Minister Armen Hayrapetian said on Thursday that the Armenian government believes in a more optimistic macroeconomic scenario because of ongoing “reforms” implemented by it. Hayrapetian also argued that the international rating agency Fitch upgraded Armenia’s economic outlook from “stable” to “positive” last month.
The World Bank’s May 2017 report also predicted that faster growth will slightly reduce poverty in Armenia. “The poverty rate [measured by the World Bank] is projected to fall from 23.8 percent in 2017 to 22.2 percent in 2019,” it said.
However, Artak Manukian, a Yerevan-based economist, insisted on Thursday that living standards in the country will actually worsen this year due to the latest increases in the prices of some essential products. Manukian singled out the increased cost of fuel, tobacco and alcohol resulting from higher excise takes that took effect on January 1.