FILE PHOTO: The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

NEW YORK — Fitch Ratings has significantly improved its outlook for Armenia’s economic growth in 2022.

According to the rating agency’s press release, the Ukraine conflict and sanctions on Russia have triggered a substantial migration of Russian, Ukrainian and Belarusian citizens to Armenia since March, with visitor numbers rising 515% yoy in 1H22.

This is further supported by a 200% yoy increase in money transfers from Russia to Armenia in 1H22. A large proportion of the migrants are believed to be highly educated professionals, particularly from the information and communications technology sector.

These trends helped boost growth 13% yoy in 2Q22 (1Q22: 8.7% yoy) and should provide momentum in 2H22. Fitch has upped its real GDP growth projections for 2022 to 6.4% as remittances boost personal consumption, and export performance (particularly to Russia) holds up. Fitch expects growth will average 4.7% in 2023-24.

Armenian government’s growth projection for 2022 is 7%, and the inflation is set at 4% (± 1.5%). Armenia’s Central Bank revised earlier upwards the country’s GDP growth forecast for the current year from 1.6% to 4.9%

According to the World Bank’s latest Global Economic Prospects report, Armenia’s GDP in 2022 is expected to grow by 3.5%, down 1.3 p.p. from the previous forecast, made in January.

World Bank analysts expect Armenia’s GDP to grow by 4.6% in 2023 (0.8 p.p. down from the January forecast) and by 4.9% in 2024.

The International Monetary Fund (IMF) expects Armenia’s GDP growth to reach 5 percent in 2022, while inflation is projected to increase temporarily before moderating by the end of the year.

Fitch Ratings has affirmed Armenia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook.

Armenia’s ‘B+’ IDRs reflect strong per-capita income, governance and business environment indicators relative to peers, as well as a robust macroeconomic and fiscal policy framework and credible commitment to reform, underpinned by IMF support. Set against these strengths are a high share of foreign-currency denominated public debt, relatively weak external finances, and geopolitical risks.

Armenia benefits from strong support and technical assistance from a range of multilateral and bilateral creditors. As of end-1H22, 48% of general government debt was owed to official lenders.

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign Up for Our Newsletters

Get notified of the latest updates from MassisPost.

You May Also Like

President of Armenian Parliament, U.S. Congressmen Discuss Broad Scope of Cooperation Issues

YEREVAN (Armenpress) —  President of the National Assembly of Armenia Ararat Mirzoyan…

Snowfall Disrupts Traffic In Yerevan

YEREVAN — Armenia’s first heavy snowfall of this year caused dozens of…

In the Country of Stones: French Photographer Nicolas Blandin Journeys Through Armenia

Nicolas Blandin’s new photo book In the Country of Stones will be…

Armenia Sells More Eurobonds to Finance Budget Deficit

YEREVAN — Armenia has sold a $500 million 10-year dollar bond on…