The World Bank forecasts a 3.1 percent GDP growth in Armenia in 2021 and expects it to raise to 4.5 percent in 2022.
“Growth in the South Caucasus is projected to rise to 2.5 percent in 2021, as the shocks related to the pandemic and conflict dissipate, and as tourism recovers alongside improving consumer and business confidence,” WB said in a new report on Global Economic Prospects.
The World Bank believes the peace statement between Armenia and Azerbaijan is expected to help alleviate geopolitical tensions in the region.
Economic activity in Europe and Central Asia (ECA) is estimated to have contracted 2.9 percent in 2020 in the wake of disruptions related to the COVID-19 pandemic. The pandemic is expected to erase at least five years of per capita income gains in about a fifth of the region’s economies and raise the poverty headcount.
Economies with strong trade or financial linkages to the euro area and those heavily dependent on services and tourism have been hardest hit.
Due to a resurgence of COVID-19, the pace of recovery in 2021 is projected to be slower than originally anticipated, at 3.3 percent.
Growth is then expected to rise to 3.9 percent in 2022, as the effects of the pandemic gradually wane and the recovery in trade and investment gathers momentum.
The outlook remains highly uncertain, however, and growth could be weaker than envisioned if the pandemic takes longer than expected to fade, external financing conditions tighten, or geopolitical tensions escalate again.