Armenia will suffer a fall in GDP by 3.5 per cent in 2020 because of the economic impact of the coronavirus pandemic, the European Bank for Reconstruction and Development (EBRD) says in its latest macroeconomic forecast published today.

The bank expects the country to rebound strongly in 2021 with GDP growth of 5.5 per cent.

According to the latest edition of the EBRD Regional Economic Prospects, “the global uncertainty and decreasing demand resulting from the coronavirus crisis, combined with volatility in commodity prices, will affect the economy directly via a decrease in exports, which are dominated by mining products, and indirectly through economic links with Russia, including a likely downturn in remittances. Prolonged measures of social containment and low mobility would hurt Armenia’s tourism sector, which is largely dependent on visits from Armenians abroad.”

The recovery will depend on a gradual relaxation of domestic measures to contain the virus and a return to normality during the second half of the year.

Economies across the EBRD regions may contract on average by 3.5 per cent this year, with a rebound of 4.8 per cent possible in 2021, the report says, warning that the projections are subject to “unprecedented uncertainty”.

The report assumes a modest impact of the crisis on the long‐term trajectory of economic output, with growth resuming towards the end of the third quarter, but potentially significant longer-term economic, political and social effects.