Page 16 - Caucasus Outlook 2023

The World Bank (WB) forecasts a slowdown in Armenia's GDP growth
in 2023 to 4.3% (from its estimated 7% growth in 2022), and the
International Monetary Fund (IMF) – to 4-5% (from an estimated 11%
growth in 2022).

In terms of inflation, both the WB and the IMF forecast a decline to
6.7% and 6% respectively (from an estimated 8.5% for 2022). The
rising cost of living due to the energy crisis and the war in Ukraine is
blamed for the slowdown.

The 2023 forecast of the central bank regarding GDP growth is the
same as the World Bank’s – 4.5% – but the 2022 forecast is very
different – 12.9% versus 7%. In terms of inflation, the expectations of
the Central Bank of Armenia for 2023 are closer to the WB forecast: a
decrease in official y/y inflation to 7% (from estimated 8.6% for 2022),
and a decrease in core y/y inflation to 6.7% (from estimated 8.7% for
2022). ). However, in its forecast update scheduled for November, the
central bank is likely to adjust its expectations for GDP growth for 2022
as well as for inflation for 2022 and 2023, taking into account new
factors that have not been taken into account in the September
forecast.

According to the National Statistical Committee, Armenia's economic
activity in the first 10 months of this year registered a growth of 14.5%
y/y. According to the Armenian government, 2022 economic growth
could be one of the highest growth rates recorded in the last 15-20
years, being in the range of 13-14% real GDP growth.

2.2.2 External environment

Armenia's foreign trade in the first 10 months of 2022 surged by 66.4%
from the first 10 months of 2021 to about $10.9bn, the National
Statistical Committee (NSC) announced.

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