Economy Minister Vahram Avanesian has again acknowledged that the Armenian economy could grow slower than expected this year because of worsening economic conditions in Russia.
The Armenian government forecast late last year a growth rate of 5.2 percent for 2014, up from 3.5 percent in 2013which was subsequently recorded by it.
The World Bank made a virtually identical forecast earlier this month. In a detailed report, it cautioned, however, that Armenian growth could still come in at 4.5 percent in case of external “downside shocks,” notably a “protracted weakening of the Russian economy.”
In its most recent World Economic Outlook, the International Monetary Fund came up with a more conservative projection: 4.3 percent. The IMF too cited the negative impact of slowing growth in Russia on the Armenian economy.
Avanesian acknowledged the possible fallout last month. He singled out the effects of Western economic sanctions that could be imposed on Moscow because of its military intervention in Ukraine.
“There is always a possibility of economic growth falling short of what was projected,” Avanesian told a news conference on Friday. “What we are saying now is that the risk of slower growth is higher than the likelihood of faster growth.”
The minister again argued that Russia is a major market for Armenian exports and the main source of vital cash remittances to Armenia. “In that sense, any worsening of the economic situation in Russia and the CIS in general certainly cannot be good for Armenia’s economy,” he said.
Some officials in Moscow admit that Russia’s economy could have zero growth and even contract in 2014.