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IMF Stands By Modest Growth Forecast For Armenia


U.S. - A man walks past the International Monetary Fund (IMF) logo at its headquarters in Washington, May 10, 2018.

The International Monetary Fund has reaffirmed its earlier projection that Armenia’s economy will grow by only 1 percent this year after shrinking by 7.6 percent in 2020.

In its latest Regional Economic Outlook released this month, the IMF pointed to the continuing negative effects of the coronavirus pandemic as well as last year’s war in Nagorno-Karabakh.

The quarterly report singles out the pandemic’s severe impact on the Armenian tourism sector which had grown rapidly since the late 2000s. It says that the sector is “projected to recover gradually sometime between 2022-2023.”

The IMF forecast the same growth rate in December when it approved a fresh $37 million installment of a loan designed to help the Armenian authorities cope with the recession.

The Central Bank of Armenia similarly said last month that the domestic economy will likely expand by 1.4 percent in 2021.

The World Bank offered a more optimistic outlook on the Armenian economy later in March, saying that it should grow by 3.4 percent. The Armenian government has forecast a similar growth rate.

Government data shows that GDP continued to shrink in January and February but showed some signs of recovery in March.

The World Bank cautioned that its GDP projection is a “baseline scenario” which assumes that the South Caucasus country will avoid coronavirus-related lockdowns and further political upheavals. “The risks to the outlook are weighted heavily to the downside,” it said in a report.

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