The impact of the war in Ukraine and sanctions on Russia is likely to be significant given Armenia’s strong economic links with Russia, the World Bank says in a fresh report.

Armenia's economy rebounded by 5.7% year on year in 2021 but is forecast to grow at only 1.2% yoy in 2022, with an uncertain outlook subject to high downside risks.

According to the WB, lower growth and remittances are likely to slow poverty reduction and increase vulnerability.

The growth forecast has been downgraded for 2022 from 5.3% pre-war to 1.2 percent, with lower remittances and real wages impacting consumption. In the mediumterm, growth is expected to pick up in 2023 and 2024, but at a slower pace than projected pre-war.