World Bank predicts Armenian economic growth will slow

The World Bank forecasts that Armenia GDP will grow 5.6% in 2008 against 14% in 2005. High world oil prices and a drop in foreign transfers will hinder economic growth.

According to Interfax, the experts said the main economic risks are connected with a strong strengthening in the national currency. They said any foreign upheaval could lead to a sharp devaluation in the dram, which would have a negative effect on the country's economy.

The World Bank is predicting a drop in economic growth for almost all of the countries in the region, however oil exporting countries will do better, including Russia, Kazakhstan, Azerbaijan and Romania. High oil prices will help form a budget surplus in these countries.

The World Bank predicts that the Armenian budget deficit will be close to European standards of up to 3% of GDP. The budget deficit was 1.7% of GDP in 2005.