Economic growth in Armenia slowing: IMF experts

/AzerNews/

By Mushvig Mehdiyev

The IMF experts say the 2014 and 2015 economic growth in the Caucasus's oil-importing countries, including Armenia, will be nearly 4.6 percent this year, which shows about a 1.6 percent decline compared to previous forecasts.

The International Monetary Fund has reviewed its forecasts for GDP growth in the Caucasus and Central Asia countries based on the tensions between Russia and Ukraine.

The IMF report clearly highlighted Armenian economy's increasing dependence on Russia and its markets. The two allies in the Eurasian Economic Union have established expanded economic ties recently and now a tremor in Russian economy causes a quake in Armenia.

The Armenian government's economic expectations which are linked to the economic hardship in Russia matched the IMF's forecast. The Deputy Finance Minister Pavel Safaryan said the sanctions imposed on Russia would force the post-Soviet country's economic growth to face a 2 percent loss in 2014.

"The economic growth has been expected to be roughly 5.2 in 2014, but the sanctions against Russia has decreased the migrant remittances and weakened the purchasing power in Armenia. Thereby, we can only hope for a 3 percent growth in economy this year," Safaryan noted.

The organization has earlier in October predicted that the real growth in the Caucasus and Central Asia countries in 2014 and 2015 would be about 6.2 percent and 6.4 percent respectively. But the ascending counteractions between Russia and Ukraine urged it to revise the figures.

The IMF report stated that the further escalation of the geopolitical tensions between Russia and Ukraine may have significant short-term and medium-term implications for the prospects of regional economies.

The critical economic atmosphere in Russia is taking its tolls on Armenia. Economists believe the decrease of the money transfers and foreign investments in Armenia are triggered by economic drawback in its northern neighbor. Moreover, a number of Russian companies are struggling with crisis in the small South Caucasus state since they keep several economic fields under control.

The Russian government expects a critical economic situation in the country in 2015. Many analysts say Russia failed to fulfill its planned economic growth in the previous years and now, the devastating economic sanctions and non-stop decrease of oil prices promise a pessimistic economic forecast in the upcoming years.

Armenian parliament will most probably ratify the country's joining the Eurasian Economic Union after discussions on November 17. Political and economic experts believe the membership at the Russia-led alliance will make the former Soviet state share the common joy and sorrow within the union or feel Russia's breathe on its face more than before. Member of the Armenian parliament Zaruhi Postanjyan has even called the EEU joining a "crime."