Overview
- GDP to decline by 7.6% in 2020; twin shocks: COVID-19 and military confrontation
- Slow recovery expected; GDP to stagnate in 2021, uncertainty stems from political instability
- Investment likely to remain subdued in 2021, consumption may recover
- Budget deficit estimate: 5.4% of GDP in 2020; public debt to rise to 69% of GDP in 2021
- Current account deficit estimated at 6.0% in 2020; lower than 2019
- Strong decline in exports (esp. tourism) counteracted by even larger import contraction
- At the same time: FDI declined by almost half in 2020, expected to recover only slowly
- Augmentation of IMF stand-by arrangement and disbursement of approx. USD 232 m key for financing the budget deficit in 2020
- Rather stable exchange rate in 1H-2020, depreciation of Dram amid high uncertainty in Q3
- After multiple reductions in 2020, hikes in policy rate in Dec-20/Jan-21 due to increased inflation
Special topics
- Trade with the EU. Negative impact of the GSP+ graduation on textile exports
- Regional trade. Ban on Turkish imports
- COVID-19. Latest data and measures of the government
- Business climate. Proposals in cooperation with German and European business