The Armenian economy is expected to grow modestly in 2014 after a sharp slowdown this year, the EBRD said in its latest Regional Economic Prospects report.

Growth had been affected by delays in public infrastructure spending and a significant increase of prices of Russian gas and related tariffs hikes.

GDP growth is now seen at 2.5 per cent in 2013 after 7.1 per cent in 2012.

The latest 2013 forecast represents a further downward revision from May when the EBRD was predicting 4 per cent growth. The revisions are largely driven by the worsening outlook for Russia and its knock-on effects in the region and on its trading partners.

However Armenia’s GDP growth is expected to recover modestly to 3.5 per cent in 2014 as remittance inflows have remained strong and Armenia’s decision to seek membership of the Eurasian Customs Union may bring about a reduction of natural gas prices.