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EBRD predicts zero growth and stagnation in Armenia in 2015
YEREVAN, JANUARY 19. / ARKA /. The Armenian economy is expected to
stagnate in 2015, according to the EBRD's latest economic outlook,
published today. According to report titled 'Regional Economic
Prospects in EBRD Countries of Operations: January 2015' the
depreciation of the Russian ruble has increased pressures on the
currencies of economies with strong trade, investment and remittances
ties to Russia, with the sharpest declines seen in Belarus,
Turkmenistan and Armenia.
The report says a sharp fall in the price of oil has piled pressure on
an already fragile Russia, and is hitting growth in energy exporters
and other emerging nations with close links to Eastern Europe's
largest economy.
EBRD economists expect Russian GDP to shrink by close to five per cent
in 2015; a major downward revision from September's forecast of a
contraction of 0.2 per cent.
However, the EBRD says lower commodity prices could benefit countries
in Central and South-Eastern Europe (CESEE) and the South and Eastern
Mediterranean (SEMED), helping to offset the continuing negative
effects of weak external demand from the eurozone.
On average, countries across the EBRD regions are now expected to see
a contraction of 0.3 per cent in 2015, after a forecast of 1.7 percent
growth in September.
"Even this forecast is subject to considerable risks," said Hans Peter
Lankes, Acting EBRD Chief Economist. He referred specifically to the
impact of any further large falls in the oil price, a further
escalation in the Ukraine/Russia crisis and a possible increase in
uncertainty in the eurozone.
On the positive side, the oil price decline - and resulting
improvements in terms of trade - could help soften the impact on
emerging economies of the expected normalization of U.S. monetary
policies.
The halving of oil prices has added to problems in Russia, whose
economic growth was already slowing down amid uncertainty and weak
investor confidence after the imposition of sanctions in 2014. Energy
exporters Kazakhstan, Azerbaijan and Turkmenistan have also been
negatively affected by the lower prices.
Even for energy importers in Eastern Europe, the Caucasus and Central
Asia, the oil price fall is a mixed blessing, as benefits are being
outweighed by lower export demand and remittances from a weakened
Russia.
The economies of Armenia and Moldova are now expected to stagnate in
2015, while in Belarus a contraction of 1.5 per cent is forecast.
The depreciation of the ruble has increased pressures on the
currencies of economies with strong trade, investment and remittances
ties to Russia, with the sharpest declines seen in Belarus,
Turkmenistan and Armenia.
The Ukrainian economy remains in a particularly precarious state, the
report said. In addition to the impact of the conflict in the east of
the country, there is currently uncertainty about the volume and
timing of international financial assistance. After a sharp
contraction in 2014, a further fall of five percent is predicted for
this year.
The EBRD report said future developments depended on both external and
domestic factors, including the ability of the Kiev government to
implement a number of key reforms, a reduction of the regional
geopolitical risks, an end of fighting in the Donbas and adequately
timed and scaled international support.
High non-performing loans (NPLs) are a key reason for weak credit
growth. NPL ratios are close to 20 per cent in most countries in
south-eastern Europe and Ukraine. In Kazakhstan they exceed 30 per
cent while in Cyprus they are around 50 per cent, respectively.-0-
http://arka.am/en/news/economy/ebrd_predicts_zero_growth_and_stagnation_in_armeni a_in_2015/#sthash.8iVPlndv.dpuf
From: A. Papazian
YEREVAN, JANUARY 19. / ARKA /. The Armenian economy is expected to
stagnate in 2015, according to the EBRD's latest economic outlook,
published today. According to report titled 'Regional Economic
Prospects in EBRD Countries of Operations: January 2015' the
depreciation of the Russian ruble has increased pressures on the
currencies of economies with strong trade, investment and remittances
ties to Russia, with the sharpest declines seen in Belarus,
Turkmenistan and Armenia.
The report says a sharp fall in the price of oil has piled pressure on
an already fragile Russia, and is hitting growth in energy exporters
and other emerging nations with close links to Eastern Europe's
largest economy.
EBRD economists expect Russian GDP to shrink by close to five per cent
in 2015; a major downward revision from September's forecast of a
contraction of 0.2 per cent.
However, the EBRD says lower commodity prices could benefit countries
in Central and South-Eastern Europe (CESEE) and the South and Eastern
Mediterranean (SEMED), helping to offset the continuing negative
effects of weak external demand from the eurozone.
On average, countries across the EBRD regions are now expected to see
a contraction of 0.3 per cent in 2015, after a forecast of 1.7 percent
growth in September.
"Even this forecast is subject to considerable risks," said Hans Peter
Lankes, Acting EBRD Chief Economist. He referred specifically to the
impact of any further large falls in the oil price, a further
escalation in the Ukraine/Russia crisis and a possible increase in
uncertainty in the eurozone.
On the positive side, the oil price decline - and resulting
improvements in terms of trade - could help soften the impact on
emerging economies of the expected normalization of U.S. monetary
policies.
The halving of oil prices has added to problems in Russia, whose
economic growth was already slowing down amid uncertainty and weak
investor confidence after the imposition of sanctions in 2014. Energy
exporters Kazakhstan, Azerbaijan and Turkmenistan have also been
negatively affected by the lower prices.
Even for energy importers in Eastern Europe, the Caucasus and Central
Asia, the oil price fall is a mixed blessing, as benefits are being
outweighed by lower export demand and remittances from a weakened
Russia.
The economies of Armenia and Moldova are now expected to stagnate in
2015, while in Belarus a contraction of 1.5 per cent is forecast.
The depreciation of the ruble has increased pressures on the
currencies of economies with strong trade, investment and remittances
ties to Russia, with the sharpest declines seen in Belarus,
Turkmenistan and Armenia.
The Ukrainian economy remains in a particularly precarious state, the
report said. In addition to the impact of the conflict in the east of
the country, there is currently uncertainty about the volume and
timing of international financial assistance. After a sharp
contraction in 2014, a further fall of five percent is predicted for
this year.
The EBRD report said future developments depended on both external and
domestic factors, including the ability of the Kiev government to
implement a number of key reforms, a reduction of the regional
geopolitical risks, an end of fighting in the Donbas and adequately
timed and scaled international support.
High non-performing loans (NPLs) are a key reason for weak credit
growth. NPL ratios are close to 20 per cent in most countries in
south-eastern Europe and Ukraine. In Kazakhstan they exceed 30 per
cent while in Cyprus they are around 50 per cent, respectively.-0-
http://arka.am/en/news/economy/ebrd_predicts_zero_growth_and_stagnation_in_armeni a_in_2015/#sthash.8iVPlndv.dpuf
From: A. Papazian