EBRD FORECASTS 8% ECONOMIC GROWTH IN ARMENIA IN 2008
ARKA
Feb 22 2008
YEREVAN, February 22. /ARKA/. The European Bank for Reconstruction and
Development (EBRD) forecasts 8% economic growth in Armenia, the EBRD
"Report on Transition Process-2007" says.
It also suggests that the forecasted real GDP growth for 2007 is 8.5%
against 13.4% of 2006. "General economic prospect is still favourable
here. Countries in transition recently survived a number of financial
market problems," the documents points out.
"Record-high economic growth rates were expected in the transition
region in 2007, however, the crisis which started on the world
crediting market in 2007 can cause a long-term slow down of the
growth rates."
The average weighted growth of EBRD activity in all the countries in
which the bank is functioning is forecasted at 7% for 2007 against 6.9%
of the previous year.
"A number of factors stimulated and strengthened the economic growth
in the transition region. These are the high level of domestic demand,
increasing investment volumes, including direct foreign investments,
as well as large volumes of private transfers, high growth rates of
credit volumes both in local and foreign banks, and in some cases
high energy carrier prices," the report says.
According to the EBRD forecast for 2008, economic growth in the
region slightly decreased with average weighted index estimated at
6.1%. Countries rich in resources will be the most rapidly growing
economies of the Commonwealth of Independent States.
EBRD experts believe that the US mortgage market problems will raise
foreign financing prices reducing the volumes of external funding,
which will help damp down the overheated economy of the transition
region.
However, "in a less benign scenario, countries with high external
funding needs may experience a stronger than expected economic
downturn," the report said.
The report noted that the financial openness of the transition region
had increased rapidly over recent years. "The events in the financial
markets this summer are therefore likely to affect financial sectors
and economic growth in the transition region" the report said.
The effects would be most pronounced in the transition countries with
large financing needs in the corporate or financial sectors. Investor
concern has been growing in particular about the Kazakh banking sector
and the current account deficits in the Baltic States.
The report suggested that, overall, capital flows to the region
would be likely to fall slightly from the record levels of previous
years. The Eurobond market was effectively inaccessible for many
issuers in August and September 2007.
According to the official data, economic growth in Armenia totalled
13.7% in 2007 as compared to the previous year. GDP volume was AMD
3139353.9.
The GDP deflator index for January-December of 2007 was 103.9% with
per capita GDP estimated at $2,844. 10% economic growth is planned
in Armenia in 2008.
From: Emil Lazarian | Ararat NewsPress
