IMF slashes 2015 forecast for Armenian economy

The International Monetary Fund (IMF) cut its 2015 growth forecast for Armenia's economy to around zero from 3.3 percent, reflecting declining exports and remittances from workers abroad as well as the impact of a plunging Russian rouble. Business Recorder reports.

The slower growth rate would affect the budget deficit, which was likely to be around 4.5 percent rather than the 2.34 percent projected by the government, said Mark Horton, the head of an IMF mission to the former Soviet state of 3.2 million people.

"(Economic) growth ... could be a little bit positive or a little bit negative, but we think around zero," he told a news conference on Wednesday.

That chimed in with a forecast of weak or negative growth made last week by the World Bank for an economy that is heavily reliant on aid and Russian investment.

The government's current forecast is 4.1 percent growth, up from 3.4 percent in 2014, although the central bank governor has said this might be revised.

Horton said the government would need to increase capital spending this year to support economic activity and added that lower growth would mean lower tax revenues.