YEREVAN, JUNE 23, ARMENPRESS. The factors that have contributed to the economic growth in Armenia last year are associated with major investments and inflow of capital, economist Atom Margaryan told ARMENPRESS when asked to comment on Moody's changing Armenia's outlook to stable from negative and affirming Ba3 rating.

Furthermore, the high valuation of the dram impacted the structure and content of exports, with re-exports also playing a significant role.

Moody's changed Armenia's outlook to stable from negative and affirmed Ba3 rating on June 22, 2023.

Moody’s changed the outlook because it found Armenia’s economic and fiscal prospects to have improved, while the risks are balanced compared to its March 2022 rating.

A part of the increased capital and workforce inflow, which improved the economic indicators in Armenia, are expected to be maintained, according to Moody’s.

The agency forecast 7% economic growth for 2023 and 5-6% for 2024.

The debt burden will be lower than during the pre-pandemic period, stabilizing around 45%, according to the assessment. 

Margaryan said that Moody’s ratings overall reflects the situation in Armenia and is a ‘positive signal’ for investors, especially when the fiscal prospects are also improved.

“The factors which have contributed to economic growth especially last year are associated with major investments and inflow of capital,” he said, adding that the fiscal situation has also improved, both in terms of revenues and spending.

Asked about balancing economic risks, the expert that that the risks should be categorized. Although the balancing of the financial risks in terms of financial stability and fiscal policy inspires positive hopes, the existing military-political risks regarding the border situation contains serious threats. For example, one of the major investment projects, the construction of a steel mill in Yeraskh, is carried out amid Azerbaijani gunfire,” the economist said, referring to the construction by GTB Steel which has intermittently come under cross-border gunfire from Azerbaijan.

Manvel Margaryan