Armenia's economic outlook for 2022 is subject to high uncertainty due to the spillovers from the war in Ukraine, the International Monetary Fund (IMF) said.
It said despite the strong momentum in early 2022, economic growth is projected to slow down to about 1.5 percent this year, primarily owing to lower consumption and contraction in trade.
Inflation is expected to remain elevated on account of higher import prices, particularly food and oil, and the current account is expected to widen as the economy adjusts to shocks.
In this regard, Armenian Central bank's recent policy tightening signals its strong commitment to contain inflationary pressures and anchor inflation expectations.
According to IMF, its ongoing supervisory initiatives would also help preserve financial stability. Fiscal space should be used prudently to mitigate the adverse impact of the war in Ukraine on the economy, while continuing to support the authorities’ medium-term fiscal consolidation efforts.
Armenian government’s growth projection for 2022 is 7%, and the inflation is set at 4% (± 1.5%). Earlier, the Central Bank revised its growth forecast for 2022 1.6% from an earlier projection of 5.3%. ($1 - 476.92 AMD)
According to Armenia's National Statistical Committee, the economic activity in the first quarter of 2022 grew by 9.6% compared to the same period of 2021. It said the economic activity in March 2022 was up 6.7% when compared to March 2021 and up 8.4% compared to February, 2022, ARKA reports.
