Yerevan/Mediamax/. The Armenian economy is expected to grow modestly in 2014 after a sharp slowdown this year, the European Bank for Reconstruction and Development (EBRD) says in its latest Regional Economic Prospects report, published today.

“Growth had been affected by delays in public infrastructure spending and a significant increase of prices of Russian gas and related tariffs hikes. GDP growth is now seen at 2.5 % in 2013 after 7.1 per cent in 2012”, the report says.

The latest 2013 forecast represents a further downward revision from May when the EBRD was predicting 4 % growth. The revisions are largely driven by the worsening outlook for Russia and its knock-on effects in the region and on its trading partners.

However Armenia’s GDP growth is expected to recover modestly to 3.5 % in 2014 as remittance inflows have remained strong and Armenia’s decision to seek membership of the Eurasian Customs Union may bring about a reduction of natural gas prices.