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