Economic Monitor Armenia – Issue 03 | June 2020

Overview

  • GDP to drop by 1.5%; pre-COVID forecast: 5.5%
  • Strong reduction of private consumption and investment counteracted by gov spending
  • Budget deficit will amount to 5.0% of GDP, compared with pre-COVID plan of 2.3%
  • Current account deficit at 8.6% of GDP, only slightly higher than pre-COVID 8.4%
  • Strong decline in exports and remittances counterbalanced by large import contraction
  • But: lower FDI and reversal of private capital inflows create problems for financing the current account deficit
  • Augmentation of IMF stand-by arrangement and immediate disbursement of USD 280 m key for financing both the budget and the current account deficit
  • Rather stable exchange rate, after temporary depreciation by 5% in March 2020

Special topics

  • Exports to EU. Impact of GSP+ graduation
  • FDI attraction. Adjustment of target groups in light of COVID-19
  • COVID-19. High and increasing case number, but restrictions mostly lifted; support measures by government and USD 300 m from international donors
Download Economic Monitor Armenia