The departure of Russian nationals (who arrived in Armenia after Russia launched the so-called ‘special military operation’ against Ukraine in 2022 February) may result in 5%-10% decline in Armenia’s GDP, according to Alexei Kuznetsov, head of the Centre for Country Analysis at the Eurasian Development Bank (EDB).
Armenian Economy Minister Vahan Kerobyan said earlier that more than 110,000 Russian nationals relocated to Armenia since 2022 February.
Speaking to reporters on the sidelines of the Eurasian Congress 2023 in Russian Sochi, Kuznetsov said neither Armenia, nor any other country had faced such a thing (relocation of thousands of foreign nationals) in the past and no one expected that it would have such an effect on economic indexes.
He added, however, that the factor of uncertainty persists because it is hard to tell now exactly what will happen if the Russians leave as quickly as they arrived.
According to him, in Armenia, other things being equal, the growth of the economy, as a whole, is estimated at 4.5%, which is 9% for two years. Now Armenia is expected to record 20% growth in the same time span.
Armenia's economy grew last year by 12.6% and according to EDB’s latest forecast, it will grow by 7.5% this year.
Kuznetsov also said that strengthening of the Armenian dram has resulted in loss of price competitiveness of the economy, and it's harder for exporters ‘to live’ in such conditions. But, on the other hand, if remittances begin to fall and the exchange rate of the dram starts weakening it will create more favorable conditions for exporters.
The AMD exchange rate has significantly strengthened in Armenia in recent months. Particularly, as of June 8, the US dollar traded at 387.04 drams, euro traded at 415.29 drams and the Russian ruble – at 4.72 drams.
Kuznetsov also recalled that remittances to Armenia in the first three months of 2023 almost tripled yoy to $1.5bln, while the entire year of 2022 saw a total of $2.6bln.
Armenia's economic growth in the 2023 state budget is set at 7%, and inflation is set at 4% (±1.5%). Armenia's GDP in the first quarter of 2023 registered 12.1% growth compared to January-March 2022, ARKA reports.
