Macroeconomic Forecast Armenia

Consumer price inflation in Armenia saw a moderate uptick in October, with inflation coming in at 3.0% y-o-y through the first ten months of the year, compared to price growth of 2.8% and 2.5% through August and May, respectively. While the 16.5% contraction in real GDP which we estimate for 2009 has seen a concomitant erosion of underlying inflationary pressures, we expect a return to positive growth in 2010 to support prices. Indeed we forecast positive growth of 4% in 2010, and target end-year inflation of 4.3% (up from an estimated 3.5% this year).

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