Armenia's Economy to Drop 9.9%, Predicts ADB

The Asian Development Bank (ADB) recently published a report with information South Caucasian and Central Asian countries’ economies. According to the bank, Armenia’s economy will drop 9.9%.

In a previous report, the bank had foreseen an increase of 0.5% for Armenia. Nevertheless, ADB is much more optimistic than either the Armenian government or the International Monetary Fund (IMF) who anticipate Armenia’s GDP to decline around 12–15%.

The report notes that the global economic slowdown, trade with Russia and the shortage of repatriation of incomes by migrants in Russia have seriously impacted the economies of South Caucasian and Central Asian countries in 2009.

Armenia, Georgia and Kazakhstan have been hit the hardest, while resource-rich, but closed off from the outside world, Uzbekistan and Turkmenistan are in more favourable positions.

ADB noted that the sharp deceleration of Russia’s economy has cut down on trade and investments, and reduced the inflow of workers’ remittances to their home countries in the region. In particular, repatriation of incomes by migrants working in Russia were reduced by 25.5% in the first half of this year.

Despite the drop in economy, according to ADB, Russia demonstrates considerable support for countries in the region, particularly Krygystan and Armenia.

For Armenia’s neighbour Georgia, ADB anticipates a 4% deficit this year, instead of its previously anticipated 2.5% growth. Though gas and oil prices have risen in the global market, Azerbaijan’s economic growth is expected to be 3% instead of the previously anticipated 8%.

Rates for other countries include Kyrgyzstan at 1% growth (previously, 4%); Tajikstan, 0.5% growth (previously, 3%); Turkemenistan, 8% growth (previously, 10%); Uzbekistan, 7% growth; and an economic decline of 1% for Kazakhstan.