Ar­me­nia sees 2017 GDP growth of 4.3%, eyes Eurobond sales

The Gulf Today - Business - - 6viewpoint -

Econ­omy of the for­mer Soviet repub­lic, which de­pends heav­ily on aid and in­vest­ment from for­mer Rus­sia, is re­cov­er­ing

YEREVAN: Ar­me­nia’s econ­omy is set to grow by 4.3 per cent this year, more than an ear­lier es­ti­mate of 3.2 per cent, the coun­try’s fi­nance min­is­ter told Reuters.

The econ­omy of the for­mer Soviet repub­lic, which de­pends heav­ily on aid and in­vest­ment from for­mer im­pe­rial master Rus­sia, is re­cov­er­ing from a fall in ex­ports and re­mit­tances that cut growth to 0.2 per cent last year from 3 per cent in 2015.

Var­dan Aramyan also said the gov­ern­ment planned to sell $500 mil­lion worth of Eurobonds in 2019 or 2020 to re­fi­nance a seven-year bond that ma­tures in 2020.

“We are go­ing to re­vise the eco­nomic growth ba­sis for 2017 and to put an indi­ca­tor of 4.3 per cent in­stead of 3.2 per cent for real eco­nomic growth this year,” Var­dan Aramyan told Reuters in an in­ter­view late on Wed­nes­day.

“Fac­tors (for higher growth) are on the sup­ply side, mostly due to high growth in the in­dus­trial sec­tor and ser­vices in tourism. Con­sump­tion is also re­cov­er­ing.”

Many Ar­me­ni­ans work in Rus­sia and send money home, while its gi­ant neigh­bour - it­self re­cov­er­ing from an eco­nomic down­turn caused by tum­bling oil prices and in­ter­na­tional sanc­tions - is the main des­ti­na­tion for the coun­try’s ex­ports.

Sub­mit­ting the 2018 bud­get draft to the par­lia­ment on Thurs­day, Aramyan said that gross do­mes­tic prod­uct (GDP) growth next year is pro­jected to be 4.5 per cent.

Aramyan said the bet­ter eco­nomic fore­casts were also helped by eco­nomic poli­cies, in­clud­ing sup­port for ex­port-ori­ented en­ter­prises and the agri­cul­tural sec­tor.

The min­is­ter said the gov­ern­ment did not need to raise money from over­seas in the com­ing years and would help fi­nance the bud­get deficit via lo­cal debt is­suance.

“But there is the $500 mil­lion Eurobond re­pay­ment due in 2020 and we are go­ing to is­sue new Eurobonds to re­pay it,” Aramyan said.

He said he would be dis­cussing prospects for is­suance with in­vestors and banks JP Mor­gan and Bank of Amer­ica Mer­rill Lynch dur­ing the In­ter­na­tional Mone­tary Fund and World Bank an­nual meet­ings in Oc­to­ber.

Aramyan said he ex­pected an­nual in­fla­tion to “en­ter the tar­get range of 4 per cent plus/mi­nus 1.5 per cent in 2017”, and to be less than 4 per cent in 2018. Con­sumer prices in Ar­me­nia fell by 0.4 per cent in Au­gust, month-on-month, but rose by 0.9 per cent year-on-year.

Ar­me­nia’s cen­tral bank said on Tues­day it had kept its re­fi­nanc­ing rate un­changed at 6 per cent.

Hav­ing launched a mone­tary eas­ing cy­cle two years ago to prop up both con­sumer de­mand and in­fla­tion, the cen­tral bank last trimmed the rate to 6 per cent in mid-fe­bru­ary.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.