World Bank predicts 3.4% growth for Armenia in 2021

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YEREVAN, June 9. /ARKA/. In its latest ‘Global Economic Prospects: June 2021’ report, the World Bank predicts that Armenia’s economy will grow by 3.4% in 2021, 4.3% in 2022, and 5.3% in 2023.

According to the report, Europe and Central Asia’s economy is forecast to expand 3.9 percent in 2021, stronger than previously projected partly owing to a more robust than anticipated recovery in neighboring euro area.

‘Nonetheless, the outlook remains challenging especially given continued disruptions from the pandemic, combined with tighter monetary policy as well as elevated policy uncertainty and geopolitical tensions,’ the report says.

It says the outlook is predicated on a faster pace of vaccination in the second half of the year in ECA’s largest economies.
The report says the recovery in early 2021 in the South Caucasus remains muted, reflecting subdued domestic demand due to the pandemic, as well as an escalation in domestic political tensions (Armenia) and continued weakness in transport and tourism (Georgia).

Monetary policy has also tightened, with Armenia and Georgia having hiked policy rates. The current forecast is predicated on the dissipation of the shocks related both to the pandemic and to conflict, and on a recovery in tourism alongside improving consumer and business confidence.

Growth in Azerbaijan is expected to be supported by stabilization of oil prices as well as investment and reconstruction spending.

The November 2020 ceasefire agreement between Armenia and Azerbaijan have alleviated geopolitical tensions in the region, although risks to stability remain elevated.

Growth in Russia, the region’s largest economy, is projected to reach 3.2% in 2021, supported by firming domestic demand and elevated energy prices. Tighter-than-expected macroeconomic policy and an escalation of geopolitical tensions in 2021 are weighing on the outlook. Growth is expected to remain steady at 3.2% in 2022.

In Turkey, the second largest economy in the region, growth is projected to rise to 5% in 2021, as exports benefit from firming external demand, before moderating to 4.5% in 2022.

The global economy is expected to expand 5.6% in 2021, the fastest post-recession pace in 80 years, largely on strong rebounds from a few major economies. However, many emerging market and developing economies continue to struggle with the COVID-19 pandemic and its aftermath. – 0-

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