Armenia’s low economic activity in 2016 is due to a drop in remittances from Russia

Armenian Central Bank’s inflation report shows that the low economic activity in the country in 2016 was largely conditioned by a drop in money remittances from Russia.

The negative impact of this process was mitigated by the government’s ‘expansive’ monetary-credit and tax-budgetary policy.

Money transfers from Russia increased by 5% in Q4, which led to acceleration of the demand growth rate by the year end.

According to the Central Bank, there was a 0,8% growth in domestic demand, but its level is still beyond the balance. With the aim to accelerate Armenia’s economic growth, it is planned to gradually restore the domestic demand, efficiently implement a number of programs aimed at enhancing export and attracting investments. Improvement of foreign economic climate and implementation of structural reforms are also the important factors.

Armenia’s economic growth rate is expected to make 2,2-3,2% in 2017, and, after gradual acceleration, to reach 3,2-4,4% in Q4. It is planned to utilize export potential to ensure this index.