IMF forecast: GDP per capita in Armenia to reach $8967 from $8029 in 2023-2025
The International Monetary Fund (IMF) forecasts per capita GDP growth in Armenia in 2023 to $8,029 (from actual $6,569 in 2022), with further y-o-y increases to $8,352 in 2024 and $8,967 in 2025. IMF reports, also providing an improved forecast for Armenia's GDP growth for 2023 from the previous 5.5% to an updated 7%, with a slowdown to 5% in 2024 and to 4.5% in 2025.
According to the IMF forecast, the absolute value of Armenia's GDP, will reach 9.4 trillion drams in 2023 (from the actual 8.5 trillion in 2022), with further y-o-y growth to 10.3 trillion drams in 2024 and 11.2 trillion drams in 2025.
For exports and imports, the IMF projects growth to slow to 22.7% and 28% in 2023, respectively (from actual 77.7% and 63.5% in 2022), after that, in 2024, exports will be in decline by 0.4% and import growth will slow significantly to 1.1%, but already in 2025, exports will grow by 5.2% and at the same time the increasing rate of imports will accelerate to 6%.
The current account deficit to GDP ratio is projected by the IMF to be 3.1% in 2023 and remain at this level in 2024, after which it will increase slightly to 3.6% in 2025. The IMF also projects a decrease in the level of gross reserves coverage of imports of goods and services to 3.6 months in 2023, and a further y-o-y decline in this indicator to 3.3 and 3.2 months in 2024-2025. Moreover, the IMF forecasts a decrease in Armenia's gross international reserves to $4 billion in 2023 (from $4.1 billion in 2022), with a further decrease to $3.9 billion in 2024 and then a return to $4 billion in 2025.
According to the IMF forecast, inflation in Armenia will decrease to 2.7 % in 2023 (from 8.6% per annum in Jan-Dec 2022), then it will rise to 3.9% in 2024 and it will stabilize at the target level 4% in 2025. The ratio of investments to GDP in Armenia will increase to 23.3% in 2023 (from 21.7% in 2022), then it will go up to 24% in 2024, and it will decrease slightly to 23.8% in 2025. The IMF also projects Armenia's public debt-to-GDP ratio to rise to 50.3% in 2023 (after a decrease from 63.4% to 49.2% in 2022), then expecting a decrease to 50.1% in 2024, and a slight increase to 50.8% in 2025.
According to statistical data, Armenia's GDP growth accelerated to 12.6% in 2022 from 5.8% in 2021. Inflation in Jan-Dec 2022 compared to Jan-Dec 2021 increased to 8.6% (from 7.2% a year earlier), which was facilitated by a significant increase by 12.5% in prices of food products and a slightly less significant increase by 7% in prices of non-food products goods, with an increase by 5.2% in tariffs for services. Moreover, such a movement in prices for food and non-food products was observed a year earlier in Jan- Dec 2021 to January-December 2020, when a significant increase by 11-8.7% in prices was recorded in these markets, but at the same time tariffs for services then increased by 1.9% alone.
Karine Melikyan