The World Bank (WB) expects GDP growth to recover after moderating further in 2019 in Armenia, it said in the Armenia Country Economic Update Winter 2019.

“Under the baseline scenario, real GDP growth will slow further in 2019, to 4.3 percent. Growth will be supported domestically by a slightly higher fiscal deficit, strong credit growth from a healthy financial sector, more open markets, and improved business and consumer confidence,” reads the report.

According to WB experts, as the impact of expected reforms takes hold, GDP growth will gradually accelerate over the medium term and inflation rate is expected to remain within 4 percent, the target range of the Central Bank of Armenia.

Additionally, the report forecasts the current account deficit to remain wide.

“The deficit will start to narrow only in 2020 and beyond, subject to structural reforms that would yield improved prospects for exports of goods and tourism,” it says.

The World Bank expects the fiscal deficit to remain modest, reducing debt levels.

WB experts also believe that domestically, reforming Armenia’s economy will require bold efforts in many areas.

“Without such bold reforms, tangible results in creating job opportunities, increasing wages, better addressing social issues and improving the business environment to be able to attract investment, are unlikely,” they note in the report. “Failure to produce these results could reignite social and political tensions, increasing economic uncertainty.”