Economy minister: Armenia needs annual 5-6% economic growth to achieve a positive social effect

ArmInfo. To implement social  programs and achieve a positive social effect, Armenia needs annual  5-6% economic growth in the mid-term outlook, Armenian Minister of  Economic Development and Investments Suren Karayan said at a press  conference on Dec 28.  

He said only in that case it would be possible to speak of positive  changes - reduction of poverty in the country and improvement of  living standards. "Wider public strata should be involved in the  process," he stressed.   

The minister said that the targeted 3.2% GDP growth in 2017 can be  ensured due to the growing exports and industry. "In late 2016 the  industrial output in Armenia will grow by 6-7%. Exports rose by 25%  as compared to 2016. Hopefully, the current level of exports will be  retained and this will stimulate the industrial production," the  minister said, recalling that the actual economic growth of Armenia  in late 2016 is expected to be 0.5-0.6% versus the 2.2% mentioned in  the state budget.

By the preliminary data, economic activity in Armenia grew by 0.6% in  Jan-Nov 2016 versus Jan-Nov 2015. It should be noted that the growth  of economic activity in the second half of the year began to slow  down. Thus, in Jan- June 2016 economic activity made up 4.8%, in  Jan-July - 3%, in Jan-Aug - 2.4%, in Jan-Sept - 1.6%, in Jan-Oct -  0.4%.  However, in November 2016 versus Nov 2015 the indicator grew  by 2.3%. In Jan-Nov 2016, services grew by 7.8% versus Jan-Nov 2015,  and industry - by 6.8% versus Jan-Nov 2015 (up 3% and 4.6%  respectively a year before).  Trade increased by 0.3% (down 7.1% a  year before). In Jan-Nov 2016, trade took the lead in absolute terms  - 1.9 trillion AMD ($4.05 bln). The following sectors ranked next:  industry - 1.3 trillion AMD ($2.7 bln), services - 1.1 trillion AMD  ($2.4 bln), agriculture - 836.1 bln AMD ($1.7 bln), construction -  320.2 bln AMD ($666.6 mln). In Jan- Nov 2016, the electricity output  in Armenia made up 6614.6 mln kWh, including 623.2 mln kWh in  November alone. In Jan-Nov 2016, the foreign trade turnover of  Armenia totaled 2195.9 bln AMD ($4576.3 mln), with an 8% year-over-  year growth. Exports grew by 21.2% to 778.1 bln AMD ($1621.7 mln),  and imports - by 2% to 1417.8 bln AMD ($2954.6 mln). 

According to the state budget, GDP growth in Armenia in 2016 is  expected to be 2.2%, in 2017 - 3.2%.  The IMF forecasts 1.9% growth,  EBRD - 2% growth, Fitch - up to 2% growth, and Moody's expects the  GDP growth to slow down to 2.2% at the yearends of 2016. The Central  Bank of Armenia expects 1.3- 1.8% growth. According to the World  Bank's forecasts, poverty will drop from 24.9% in 2016 to 23.2% in  2018. Independent economists think the country has been experiencing  economic slowdown since autumn and it may turn into long-term  economic stagnation.