Armenia’s economy to grow by 2.7% in 2017: World Bank

Growth temp of Armenia’s economy based on World Bank (WB) anticipations will comprise 2.7% in 2017. It’s enshrined in “Trade in Transition” report issued by the WB.

According to the WB 2.7% growth reflects maintained enlargement of tradable sectors and modest recovery of internal consumption.

It’s mentioned in the report that medium term growth is projected to average 3-3.5 percent a year, given structural weaknesses in the domestic policy framework, and remaining uncertainties in external environment.

Note, based on the Law on State Budget 2017 this year 3.2% economic growth is anticipated, and 6.4% economic activity recorded in the first quarter of ongoing year allows hoping that the growth index will be even higher. However, as we may see, the WB doesn’t share optimism of Armenian government.

It’s anticipated that by restraint of expenditures by the government and full implementation of Tax Code in med-term perspective budget deficit will be maintained on the level of less than 3% of GDP.

Based on WB assessments policy changes envisaged in the Tax Code would boost revenues by 2 percentage points of GDP by 2021. Future poverty reduction will hinge on the recovery of the domestic economy, labor-market dynamics, and remittance inflows.

Low growth rates, unfavorable external conditions, and limited fiscal space could slow the pace of poverty reduction; as a result, the poverty rate is projected to fall from 23.8 percent in 2017 to 22.2 percent in 2019.