Macroeconomic Forecast Armenia

Preliminary estimates from the Central Bank (CBA) indicate that Armenia's current account deficit deviated from our forecasts in 2005, by shrinking to US$0.15bn (3.2% of GDP) from 4.6% in 2004. This improvement occurred despite the trade balance widening almost 30% on the previous year. Surpluses in the income and transfer balances, due largely to generous foreign aid packages and workers' remittances, offset the developments in merchandise trade. We expect this trend to continue over the forecast period, with the current account gap rising only marginally in nominal terms and gradually falling as a proportion of GDP. An appreciating currency represents a risk to these forecasts, as it erodes the competitiveness of exports and the value of wages sent from those working abroad.

To read the full article, please choose one of the following options: