Armenian economy in 2022 is expected to expand by 4.8% and by 5.4% in 2023, according to World Bank’s latest report Global Economic Prospects, January 2022. Armenian government's growth projection for 2022 is 7%.
The report says in Armenia, growth is expected to accelerate in 2023, as robust private consumption and a more stable investment climate support domestic demand and offset the drag from ongoing fiscal consolidation, ARKA reports.
The forecast is predicated on an easing of geopolitical tensions, limited pandemic-related disruptions supported by progress with vaccinations, and improving consumer and business confidence.
Weighing on the outlook are legacy structural issues and weaker oil prices in Azerbaijan, as well as challenges with reform implementation in Armenia.
According to the report, growth in Eastern Europe is projected to be the weakest among the ECA subregions, halving from 3.1 percent in 2021 to 1.4 percent in 2022. The subdued outlook, particularly for private investment, reflects ongoing geopolitical tensions in Ukraine and the impact of economic sanctions on Belarus’s economy, which is expected to contract in 2022.
Assuming geopolitical tensions do not escalate further, improving domestic demand should help lift output in Eastern Europe to 3.2 percent in 2023. Longer-term growth prospects are constrained by sluggish reform momentum, which has hindered competition and private-sector development.
According to the WB, growth in the Russian Federation—the region’s largest economy—is projected to moderate to 2.4 percent in 2022, as macroeconomic policy continues to tighten and domestic demand wanes, and to further decelerate to 1.8 percent in 2023, as industrial commodity prices edge down.
