Republic of Armenia
Federation of Euro-Asian Stock Exchanges
The baseline scenario for Armenia’s growth envisages a continuation of recent trends, with GDP expected to expand by 5.5 percent in 2019. Private consumption will remain strong, with an additional stimulus from higher government spending that offsets the weakening external environment.
Continued structural reforms and sound macroeconomic policy will keep inflation low and attract investment, supporting healthy GDP growth rates of over 5 percent for the medium term.
Due to the over-performance of tax collections, the budget deficit is expected to stay below 0.5 percent of GDP in 2019 and will accelerate to around 2 percent in the medium term. Strong commitment to fiscal consolidation will contribute to a reduction of the debt-to-GDP ratio to around 50 percent in 2021. Supported by the higher export of goods and tourism, the external balance will improve.
As the economy continues to grow and with sustained social transfers, poverty will continue its decline, with the poverty rate, measured at the lower-middle-income poverty line of US$3.2/day (2011 PPP), reaching roughly 7 percent by 2021.
The risks related to the global growth outlook remain firmly in the downside, including the possibility of escalating trade tensions as well as rising debt and its subsequent risk to emerging markets.
Domestically, the concerted effort to restructure the economy toward a sustainable export-led growth path remains a challenge that will require an efficient government, better connectivity, a more reliable infrastructure, and higher investment in human capital.
The Government’s strong commitment to reducing corruption and improving the business environment, along with prudent macro-fiscal policies, provides an opportunity for a vibrant response from the private sector.
Economic Development and Outlook
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