YEREVAN, April 3. /ARKA/. Citing the coronavirus outbreak and the government’s efforts to contain its spread, Armenia’s Central Bank predicted today that the country’s economic growth will significantly reduce in 2020.
According to the regulator’s inflation report for the first quarter of 2020, the year began with a high level of economic activity. Thus, in January industry, construction, trade and services grew by 13.4%, 7.7%, 10.3% and 13.2%, respectively.
‘The spread of coronavirus and anti-epidemic measures to combat it will significantly suppress economic activity in 2020. Its negative impact will largely materializes in the second quarter of 2020, after which, along with a reduction in uncertainties, the economy will gradually return to normal,’ the bank said.
“The negative impact will affect all branches of the economy, but industries that are closely related to tourism and leisure are more vulnerable. We predict that the growth will drop to 0.7% in 2020, which is significantly lower than the previous forecasts, but will recover in 2021 to 7.2%,” the report said.
It said despite the expected short-term impact of the epidemic, its duration remains a risk, and further development of economic activity, as well as the structure of the economy and potential level will largely depend on it.
Under these conditions, in the first half of 2020, the GDP gap will remain in the negative range, which will be mitigated by the impact of a stimulating monetary policy and the expected stimulating budgetary impact.
The Armenian government’s original projection of growth for 2020 is 4.9%. The inflation projection is 4% (± 1.5%). -0-