Economic growth in Armenia will remain faster than in neighboring Georgia and Azerbaijan in the coming years, according to the World Bank.
In its latest Global Economic Prospects report released on Thursday, the bank revised upwards its economic growth forecasts for Armenia. By contrast, it expects even slower growth in Georgia and Azerbaijan than was forecast in its previous report released in June.
The Armenian economy has expanded robustly since 2017 after years of sluggish growth that followed the 2008-2009 global financial crisis. According to government data, economic growth reached 7.5 percent in 2017 but slowed to 5.2 percent in 2018, which saw a dramatic regime change in the country. Government officials say it accelerated to more than 7 percent last year.
The World Bank estimated Armenia’s 2019 growth at 6.9 percent, sharply up from 4.2 percent projected by its June report.It said the Armenian economy will grow by 5.1 percent this year and slightly faster in 2021 and 2022. The bank predicted lower growth rates in June.
According to its latest report, the Georgian economy grew by 5.2 percent in 2019 and should expand by 4.3 percent this year and slightly faster in 2021 and 2022. The bank sees much slower growth in hydrocarbon-rich Azerbaijan: 2.5 percent in 2019, 2.3 percent in 2020 and 2.1 percent in the following years. These figures represent downward revisions of the bank’s previous GDP projections for the two South Caucasus states.
Two years ago the World Bank upgraded Armenia’s status from a “lower middle income” to an “upper middle income” nation. The official poverty rate in the country fell from 29.4 percent in 2016 to 23.5 percent in 2018.
The robust growth allowed Armenia to surpass Georgia and nearly match Azerbaijan in terms of GDP per capita last year. The International Monetary Fund forecast recently that Armenia’s GDP per capita, worth an estimated $4,530 in 2019, will also exceed Azerbaijan’s by the end of 2020.
Economist say the Armenian dram’s relatively stable exchange rate is another reason for this trend. Unlike the national currencies of Azerbaijan and Georgia, the dram has avoided a major devaluation since the collapse of international oil prices which began in late 2014.