YEREVAN, August 23. /ARKA/. The Central Bank of Armenia has revised its GDP growth outlook for 2014 lowering it from the previously predicted 4.1-4.8% to 3.6-4.2%, according to the regulator’s inflation report based on its monetary policy for the 3rd Q 2014 and its performance of the 2nd Q 2014 monetary policy.
“The downward change in the economic growth outlook came amid the current developments in the domestic economy, a less-than-planned expansionary tax and budgetary policy and pessimistic outlooks for the Russian economy’s prospects,” the central bank says in its report.
According to the report, the economic development will mainly be propelled by the services sector – its annual contribution to the economic growth is estimated at 2.3%.
“Amid a slow recovery of economic activity, the increase of prices for electricity on August 1 and the introduction of new excise labels for some goods in the fourth quarter, inflation, remaining still low, will slightly rise in the second half of this year standing at the bottom benchmark of the projected range,” the regulator says in its report.
In accordance with the formed and expected macroeconomic environment, the central bank will continue weakening monetary and lending conditions in the third quarter, and this, along with these conditions mitigation made before that and the projected expansionary tax and budgetary policy will increase gross demand and recover inflation pace.
As a result, economic activity will speed up bringing stability to inflation rate and keeping it within the projected benchmarks.
According to the central bank’s forecast, economic growth will speed up.
In the 2014 government budget, inflation is projected at 4% (±1.5%) and GDP growth at 5.2%. –0–
