IMF Forecasts Armenian GDP Growth of 3 pct, Inflation at 2 pct in 2017

YEREVAN — The International Monetary Fund expects Armenia’s gross domestic product to grow by 3 percent and annual inflation to reach 2 percent in 2017, Hossein Samiei, the IMF mission chief, said on Wednesday. At the same time, he noted that according to his estimates, the country has the potential to achieve 4% year-end growth.

He said the higher growth can be achieved if the Armenian government carries out structural reforms and improves the competitive conditions, enabling the economy to become more active.

According to him, the forecast was revised upward because of a higher than planned level of implementation of capital programs in 2016 December, financed from external sources. In this regard, Mr. Samiei added that in the absence of financing, the growth would have been projected at 2%.

The IMF mission completed its visit to Armenia this week.

Armenia depends heavily on aid and investment from Russia, whose economic downturn has hit Armenian exports and much-needed remittances from Armenians working there.

In December, the IMF forecast 2017 economic growth of 2.7 percent. The economy grew 6 percent in the first quarter of 2017, IMF data show.

Remittances from abroad and copper prices have also picked up and growth in Russia should improve this year, Samiei said. He cautioned that the recovery in remittances and copper prices might not last and growth in key trading partners may be weaker than expected.

He said that the government promised to put effort into diversifying exports, tackling corruption and implementing structural reforms.