YEREVAN, March 25. / ARKA /. Armenia’s current account deficit of the balance of payments will increase to 9.2% of GDP in 2015, and drop to 8.3% in 2016, according to the Asian Development Outlook 2015 report, released by the Asian Development Bank (ADB).
According to the report, this forecast is related with considerable risk because of the strong influence of the Russian economy on Armenia. It says Russia accounts for a quarter of Armenian imports and exports and for more than 80% of remittances, as well as for more than 50% of foreign direct investment.
According to ADB, Armenia’s current account deficit of balance of payments in 2014 was 8.5%, up from 8% in 2013.
It says Armenia can succeed in stimulating industrial production after being exempted from paying customs dues on imports of natural gas, crude oil and diamonds within the Eurasian Economic Union (EEU), as well as because of reduced non-tariff barriers within the Russia-led trade union.
It says however that these benefits from Armenia’s membership in the EEU may be offset or limited by geopolitical difficulties of Russia and limited capacities of Armenia’s agricultural sector as 60% of Armenian agricultural products are exported, and the bulk of exports go to the Russian Federation.
The report says also Armenia will have to reconsider its customs duties with the WTO, which it joined in 2003. All these factors taken into account, the ADB predicts a 1.5% GDP growth for Armenia in 2015 and a 2.2% growth in 2016.
The ADB has lowered its GDP forecast for Armenia for 2015 from 4.6% to 1.6% due to “the pressure” of the Russian economy on Armenia. In addition, the ADB expects inflation in Armenia to be 4.6% this year.
According to the National Statistical Service, Armenia’s foreign trade turnover in January-February stood at $592.5 million, a decrease of 27.7% when compared to the same period in 2014.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.-0-
