World Bank Forecasts 3.8% Economic Growth in Armenia in 2018

YEREVAN (Arka.am) — The World Bank has changed its economic growth outlook for Armenia in a period between 2017 and 2019 upward.

In their “Broad-Based Upturn, but for How Long?” report, the WB analysts upgraded their outlook for Armenia by 1 percentage point, compared with their June outlook, to 3.7% in 2017, by 0.7% to 3.8% in 2018 and by 0.6% to 4% in 2019.

In the Armenian government budgets for 2017 and 2018, GDP growth is projected at 3.2% and 4.5% respectively.

“Growth in the Europe and Central Asia region is anticipated to ease to 2.9 percent in 2018 from an estimated 3.7 percent in 2017,” the World Bank says in its report. “Recovery is expected to continue in the east of the region, driven by commodity exporting economies, counterbalanced by a gradual slowdown in the western part as a result of moderating economic activity in the Euro Area.”

Increased policy uncertainty and a renewed decline in oil prices present risks of lower-than-anticipated growth.

Russia is expected to expand by 1.7 percent in 2018, unchanged from its estimated growth rate in 2017, and Turkey is projected to moderate to 3.5 percent this year from 6.7 percent in the year just ended.

Among post-Soviet countries, Azerbaijan is expected to face 1.4% economic decline in 2017 and 0.9% growth in 2018, Kazakhstan may have its economy grown 3.7 percent in 2017 and 2.6 percent in 2018, Belarus may record 1.8% and 2.1% growth respectively, Kyrgyzstan may enjoy 3.5% and 4.2%, Moldova 3.5% and 3.8%, Ukraine 2% and 3.5% and Georgia 4.3% and 4.2%.

The World Bank forecasts global economic growth to edge up to 3.1 percent in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

However, this is largely seen as a short-term upswing. Over the longer term, slowing potential growth—a measure of how fast an economy can expand when labor and capital are fully employed—puts at risk gains in improving living standards and reducing poverty around the world.

Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off. Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5 percent in 2018, as activity in commodity exporters continues to recover.