Degree of uncertainty is big, real GDP to reduce by 2%: finance minister

To smooth the consequences of coronavirus the government has developed a bill on making changes in the law on 2020 state budget.

“Due to the impact of the epidemic the economic growth in partner countries and unions slows down, decline of world economy is predicted and Armenia is part of it,” minister of finance Atom Janjughazyan said at the NA today, presenting the draft.

The minister said that it is supposed that the economic impact in our country will be in the form of reduction of export, reduction of money transfer flows.

The acting restrictions had their impact and will continue affecting our country, the minister said, adding that the volume of investments will reduce too.

“There is a big degree of uncertainty regarding the shock of the demand and the growth of savings agreed with it, more modest investments or their possible reduction, possible growth of unemployment, low incomes, reduction of consumption. The assessment is 2-2,4 percent point in real GDP growth rate. We will have about 2% reduction,” the minister said, reminding that 2020 budget law predicted 4,9% economic growth and the budget circle was built with that logic while the currently proposed draft predicts 2% decline.

Janjughazyan stressed that economic reduction is obvious. “The issue is how much it will be. It is obvious that the bankruptcy risks are also unavoidable,” he said, adding that it is offered to approve 150 billion AMD package to create prerequisites for the expected negative economic developments and quick restoration.