YEREVAN, June 18, /ARKA/. The Armenian economy has been significantly affected by the coronavirus pandemic and the military conflict between Armenia and Azerbaijan in late 2020, leading to a real GDP contraction of 7.6% in 2020 (vs. the ‘B’ median contraction of 4.2%), according to the Fitch Ratings.
Fitch said it expects the economy to recover moderately by 3.2% in 2021 and 4.0% in 2022, which should improve prospects for banks’ credit growth and revenues.
‘At the same time, we believe that the downturn has not yet been fully captured by banks’ asset quality metrics reported in 2020-1Q21 and problem loan recognition will continue in 2021 and potentially in 2022. Some risk aversion and continuing business uncertainty still weigh on growth appetite, further constraining potential for near-term profitability improvements.’
Armenian government’s GDP projection for 2021 is 3.2%,; the inflation is set at 4% (± 1.5%).
The Central Bank revised last week upward its growth forecast to 4.6%. The World Bank predicts 3.4% growth in 2021, 4.3% in 2022, and 5.3% in 2023. The IMF forecast for 2021 is 1%.
According to S&P Global Ratings, Armenia’s real GDP growth will be 2.5% in 2021 and 4.5% in 2022-2023.