YEREVAN, November 26. /ARKA/. According to the Central Bank of Armenia (CBA) projections, gross domestic expenditures in the economy are expected to reduce by 1.4% as of the end of 2014, says the regulator’s inflation report based on monetary-credit policies program for Q4 and actual performance for Q3.

Economic growth slowdown in main partner countries, as well as continuous low investment activity in Armenia, along with low-than-expected government spending, led to 1.4% reduction in gross domectic expenditure, says the report.

According to the document, household spending were substantially lower in the second quarter 2014 than the projections. Spending on private consumption will continue dropping in the second half of the year, says the central bank. Hence, the regulator projects a 1.7% reduction in private consumption in 2014.

The central bank also says growth of actual investments in the private sector will be relatively low, 1.4%, due to low investment activity.

Personal consumption expenditures will fall by 1.2% in 2014 amid dropping consumption and investment activity, according to the report.

At the same time, expansionary monetary-credit, taxation and budget policies pursued in 2014 will lead to gradual recovery of the gross domestic demand and increase it by 3.5-4%, facilitated by expected growth of Armenia’s main trade partners.

The central bank has lowered Armenia’s GDP growth projection to 3.1-3.6% for 2014 and made a downward revision of the potential economy growth level. According to the regulator, inflation will increase to 3.2%, close to the target level.

According to the budget, Armenia’s GDP growth is 5.2% and inflation is 4% (±1.5%) for 2014. –0--