I am impressed to see high growth rates in 2023 in Armenia – ADB President
YEREVAN, NOVEMBER 27, ARMENPRESS. The Asian Development Bank (ADB) forecasts 2,6% average annual inflation for 2023 in Armenia, which is quite low compared to 2022 when inflation reached 8.6%, Masatsugu Asakawa, the President of the Asian Development Bank , said in an interview with Armenpress.
In terms of Armenia’s economic indicators, one of the key factors contributing to this success is the implementation of structural reforms, Masatsugu Asakawa said. The ADB President arrived to Armenia on a two-day visit on November 27.
First of all, I would like to ask You to present the purpose of Your visit to Armenia, what meetings and new agreements are expected?
Our visit to Armenia is multifaceted and has a comprehensive agenda. We aim to strengthen our collaboration and support for ongoing projects in the country, explore new partnership opportunities, and meet high-level officials.
During our visit, we have had the privilege to meet esteemed leaders, including the Prime Minister and the President of Armenia. One of the most significant highlights is the loan signing for the Yerevan Urban Development Investment Project, or YUDIP, which will construct a 1.8 km road and bridge over the Hrazdan River. This will greatly improve connectivity, reduce traffic congestion, and enhance green spaces for people living in Yerevan.
YUDIP is aligned with Armenia's climate goals and the Paris Agreement, and we’re excited about the prospects for this and other ongoing ADB projects to improve connectivity, boost productivity, and ultimately reduce poverty. We look forward to working together to ensure smooth implementation.
What programs is the Asian Development Bank currently implementing in Armenia and how much financial support has it provided to the government and the country?
Since Armenia joined the ADB in 2005, the bank has supported the country to diversify its economy and increase opportunities for all Armenians to benefit from economic growth.
Since the beginning of our partnership, ADB has provided financial assistance worth more than $1.8 billion, supporting government priorities in the transport, energy, water, and urban infrastructure sectors.
ADB is currently implementing six projects with the government totaling $525 million in transport and urban infrastructure development. These initiatives are helping land-locked Armenia improve its regional and international connectivity to boost growth and development. Under the new country partnership strategy, ADB will continue supporting Armenia’s regional cooperation and integration.
Our private sector portfolio comprises six projects totaling more than $230 million in the energy, finance, and agriculture sectors. Going forward, ADB will continue to expand its private sector operations and maximize the synergies between sovereign and private sector operations.
What are the forecasts of the Asian Development Bank for the economic growth and inflation of Armenia for 2023, how does the Bank assess the economic situation in Armenia in general? What factors greatly influenced that prediction? What are the predictions for 2024?
I commend the government for achieving impressive economic growth in 2022, despite facing various global and regional challenges. I am also impressed to see high growth rates in 2023. Our latest forecast for this year's growth is 7%, which I believe is in line with the government's target.
In terms of average annual inflation, our forecast for this year is 2.6%, which is quite low compared to 2022 when inflation reached 8.6%. This reduction is partly due to proactive monetary policy being implemented by the Central Bank of Armenia.
One of the key factors contributing to this success is the implementation of structural reforms. The government has an ambitious reform agenda in several areas, including public administration, governance, anti-corruption, public financial management, tax administration, and digitalization.
Private sector development and domestic resource mobilization are also critical for economic growth and job creation. I am happy to note that the government continues to prioritize investments in infrastructure development – which is crucial for sustaining growth over the long term and ensuring that this growth is more inclusive.
As ADB and the Government of Armenia are working together on the new Country Partnership Strategy for the country, how will the new CPS support the government's development priorities?
We are committed to supporting Armenia in achieving its long-term development goals. We aim to help Armenia build an export-driven, knowledge-based, and inclusive economy.
We are currently finalizing our new Country Partnership Strategy (CPS) for 2024–2028, which we plan to submit to ADB's Board of Directors in January 2024. The CPS is in line with Armenia's long-term strategy and the government's program for 2021–2026.
Through the CPS, we aim to help Armenia strengthen private sector-led growth with the ultimate goals of reducing poverty and inequalities and improving connectivity and productivity. These will be achieved by creating job opportunities, improving governance, and enhancing the effectiveness of reforms. ADB will continue supporting the government’s efforts to promote gender equality and gender-inclusive growth by improving the enabling environment and capacity of women. We also aim to help improve the quality of education and healthcare, and address climate and disaster risks.
What new projects is the Asian Development Bank preparing to implement in Armenia, in which areas, and at what cost?
ADB recently approved an additional financing of $72.3 million for the Seismic Safety Improvement Program which supports the seismic safety and resilience of 46 schools in Armenia. The program is crucial to the country's School Strengthening and Renovation Program and National Strategy for Disaster Risk Reduction. This support is testament to the government’s and ADB’s commitment to securing a safe and resilient future for Armenia's children.
As Asia and the Pacific’s climate bank, we are also helping Armenia mitigate and adapt to climate change. Today, I joined senior government members at the launch event of a new ADB report that explores opportunities for Armenia to incorporate climate adaptation into its fiscal planning. We’re also preparing a proposal to help improve food security for vulnerable communities by providing them with climate-sensitive energy solutions which will help to reduce their dependence on the national grid. Through technical assistance, we are helping Armenia build the institutional knowledge needed to meet its Nationally Determined Contributions under the Paris Agreement.
ADB actively collaborates with counterparts in Armenia to invest in sustainable infrastructure, advance the digital agenda, address fiscal needs, and foster private sector partnerships. This underscores the potential for remarkable growth in this nation and the promise of our partnership.