YEREVAN, June 4. /ARKA/. The Central Bank of Armenia forecasts a 4.6 to 6.1 percent economic growth in the country in 2019, Arthur Javadyan, the head of the regulator, said Monday at the discussion of its activity annual report in the National Assembly.
“According to our short-term outlook, economic growth will stand between 4.6 and 6.1 percent in 2019 which will mainly be fueled by consumption in the private sector,” he said adding that this forecast is approved by the central bank’s board on March 22 and based on studies and the macroeconomic situation as of February.
Javadyan said that the high private consumption growth will be mainly propelled by faster-than-expected growth in loans provided to businesses.
Investments will grow not so fast, compared with the high growth indicator recorded in 2018, which impacts investment indicators for 2019.
The head of the central bank also said that the impact of export and fiscal policies on demand will be hobbling economic growth throughout the entire year because of increase in imports along with the reduction of the government budget deficit.
”In the foreseeable future, which consists of 12 quarters, economic growth will stand between 3.8 and 5.9%,” Javadyan said. “In a short run, which consists of 12 quarters, economic growth will be determined mostly by expansion of industrial capacity, the government’s policy of structural reforms and the expected level of economic development potential in partner countries.”
He also said that inflation stood at relatively low level in the first quarter 2019 – 1.9% in March, mostly due to the restraining tax and budgetary policy and weak demand.
“Taking this into account and also taking into account global trends, the regulator found it necessary to down the refinancing rate by 0.25 percentage points to 5.75%. Any case, the central bank prefers a gradual return to inflation expectations [to 4%],” the head of the central bank said.
In the government budget for 2019, economic growth is projected at 4.9% and inflation at 2.7%.