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World Bank Downgrades Armenia's Growth Outlook

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  • World Bank Downgrades Armenia's Growth Outlook

    WORLD BANK DOWNGRADES ARMENIA'S GROWTH OUTLOOK

    By MassisPost
    Updated: March 31, 2015

    YEREVAN (RFE/RL) -- In a significant downward revision of its earlier
    projections, the World Bank said on Tuesday that economic growth in
    Armenia will likely slow to just under 1 percent this year due to
    spillover effects of a recession in Russia.

    The bank forecast late last year that the Armenian economy will expand
    by 3.5 percent in 2015 -- as fast as it did in 2014, according to
    official statistics. The Armenian government was even more upbeat,
    forecasting a growth rate of 4.1 percent.

    Laura Bailey, the head of the World Bank's Yerevan office, said
    that the figure is unlikely to exceed 0.8 percent. She warned that
    even this growth projection could prove overly optimistic in case
    of a deeper-than-anticipated crisis in Russia or renewed drastic
    fluctuations of the Armenian dram's exchange rate.

    "I don't have a forecast for what will happen with the dram," Bailey
    told a news conference. "What I am trying to communicate is that
    if there were sharp, abrupt changes either direction, that can be
    disruptive to exports and trade."

    "That's what we worry about, not as much whether the dram were to
    weaken a bit more gradually or strengthen but the sharpness," she
    said, cautioning against a repeat of a brief currency crisis that
    hit Armenia in December.

    The Armenian currency weakened by roughly 18 percent against the U.S.

    dollar in November and December amid falling remittances from Armenians
    working abroad and Russia in particular. Its exchange rate has been
    largely stable so far this year.

    Deputy Prime Minister Vache Gabrielian seemed to acknowledge on Monday
    that the government too will have to revise its projections downwards.

    "The government has never said that there will be no changes in the
    [forecast] indicators," he told reporters. "There will be discussions
    [in the government] soon. I will present forecasts to you as soon as
    those discussions are over."

    "We are going to have less growth than was projected," said Arsen
    Ghazarian, the head of Armenia's largest business association.

    "Forecasts range from 0.5 percent to 2 percent."

    http://massispost.com/2015/03/world-bank-downgrades-armenias-growth-outlook/

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