Republic of Armenia. Recent social and economic trends and short-term prospective. September 2019

27 January 2020

Armenia's economy grew by 5.3% in 2018. Growth was significantly aided by increase in inventories, including those to be used in the exploration of the Amulsar gold mining site. Inflation remained well below the target range of the Central bank of Armenia due to the real appreciation of the exchange rate, slowing consumer demand and subdued world food prices. Consolidation of budget expenditures in accordance with the requirements of the new Budget Rule and changes in tax legislation has brought a reduction in the fiscal deficit and resulted in the surplus of the primary balance. The current account deficit widened significantly as a result of investment projects in the first quarter of the year and credit growth amid lower interest rates. In 2019, economic growth is expected to slow down to 4.4% due to a reduction in the growth rate of investment demand as a result of a contractionary fiscal policy.