YEREVAN, SEPTEMBER 26, ARMENPRESS. The Asian Development Bank (ADB) published the updated version of the Asian Development Outlook 2019 report according to which the forecast for Armenia’s economic growth has improved, rising to 4.8% from the 4.3% forecast of the April 2019 report.

The ADB’s updated report says the growth in Asia remains stable, forecasting 5.4% economic growth in the region, or by 0.3% less from the forecast made in the April report. In 2020 up to 5.5% economic growth is expected. Excluding the new industrial entities with high incomes (Hong Kong, China, South Korea, Singapore and Taiwan), up to 6.0% economic growth is forecast in the region in 2019 and 2020.

The economic growth of the subgroup of the countries of Central Asia has increased with this Update, comprising 4.4% instead of 4.2% for 2019, and 4.3% instead of 4.2% for 2020. It’s worth noting that Armenia is among the countries the economic growth forecast of which has been among the highest based on this update result. It is stated in the report that within the two years the deficit forecast expanded for Armenia, Kazakhstan and Tajikistan, narrowed for Georgia and Turkmenistan.

According to this Update, as Armenia grew robustly on private consumption in the first quarter of 2019, its growth projection for the whole year is raised from 4.3% to 4.8%, while the earlier forecast of 4.5% growth in 2020 is retained. It is forecast that inflation in 2019 will be 3%, and the updated forecast for 2020 will remain unchanged 3.2%.

“Growth moderated from 8.7% year on year in the first half of 2018 to 6.8% in the same period of this year—still robust, reflecting buoyant domestic demand. Industry excluding construction performed strongly, expanding by 5.2% as growth in manufacturing and mining outweighed lower electricity production. Construction grew by 3.5%, largely from higher household construction. Services rose by 9.8% on strong gains in information technology, finance, insurance, and recreation. Unfavorable weather constrained agriculture, which, having contracted by 8.5% in the whole of 2018, contracted further by 6.9% in the first half of 2019. On the demand side, private consumption expanded by 14.0% in the half year, encouraged by moderate inflation, positive consumer sentiment, and low interest rates that boosted consumer borrowing”, stated in the Update.

The Update says downward revisions to the regional growth outlook stem largely from escalating trade tensions, which have affected in particular the more open economies of East and Southeast Asia. Also dampening the growth outlook are deteriorating prospects in the advanced economies and declining investment in developing Asia. In Central Asia and the Pacific, however, increased public spending should support growth higher than forecast in April. Downside risks to the region’s prospects have intensified. The trade conflict may yet intensify, possibly moving beyond tariffs. Evidence already shows it reshaping trade patterns, supply chains, and foreign investment. This Update also notes a buildup over the past decade of debt in the region, both public and private, that could erode financial stability and render economies more vulnerable to shocks. Taking a longer view, this Update examined the growing importance of cities in developing Asia. It highlighted rapid urbanization in the region and its potential to deliver sustained income and job growth. To function well as labor markets and fulfill their promise, cities need to upgrade their transport systems, plan urban expansion better, and enlarge the supply of adequate and affordable homes. Crucially, cities need to ensure that they are environmentally sustainable, the report said.

Edited and translated by Aneta Harutyunyan