UN report forecasts 4.1% GDP growth for Armenia in 2012

Armenian economy in 2012 and 2013 will expand by 4.1% and 4.4% respectively, according to UN World Economic Situation and Prospects 2012 report, released on Tuesday. The report says that economic activity expanded in the CIS in 2011, although growth was subdued in comparison to the faster pace observed prior to 2008. 

 Aggregate gross domestic product (GDP) in the region rose by about 4.3 per cent in 2011, compared to 4.5 per cent in 2010, with the Russian Federation remaining the major force of economic dynamism in the CIS region. Growth will, however, weaken in the outlook due to the deterioration of the global economic situation, particularly in developed economies, and the resulting decline in commodity exports and commodity prices.

"High economic growth rates achieved ahead of the 2008 recession have yet to return to the Commonwealth of Independent States (CIS) and Georgia," the report said. "The aggregate growth for the CIS, is expected to decelerate to 4.0 per cent in 2012 before accelerating somewhat in 2013 as demand fr om developed economies eventually strengthens."

According to the report, with a weakening of oil prices, deficits are likely to widen unless revenue is strengthened. This holds for the Russian Federation, in particular, wh ere greater social and public spending in the run-up to the presidential elections is expected to widen the fiscal budget deficit. It says the region experienced a significant rebound in agriculture after a bad harvest in 2010. This was especially important for Armenia and Ukraine. The report predicts 3.9% GDP rise for Russia in 2012 and a 4% rise in 013. It says also Armenia’s inflation may drop to 5.5% in 2012 and further to 4% in 2013.

According to the report, in 2011 inflation in the CIS region climbed to 9.6% against 7.1% in 2010. However, inflation for all consumer goods in Russia peaked in the first half, but in the second half fell sharply as the impact of the 2010 drought was declining.

Source: ARCA

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