Wednesday, January 13 2016 18:12

ArmInfo. The 2.2% economic growth forecasted by the World Bank for Armenia for 2016 is quite predictable, economist Vardan Bostanjyan said at a press conference on January 13. "For Armenia, which has a small commodity turnover, the 2.2% growth is a small figure and it will not be hard to achieve it. In case of reasonable use of budget funds, we might achieve a higher figure.  We need to reconstruct and diversify the economy," the expert said.

Bostanjyan mentioned the priority directions for an efficient economic policy. In this context, the economist pointed out the lack of a free field of SME competition due to monopolization.

"In more developed countries the SME share in the GDP ranges from 65% to 75%, while in our country that indicator is much lower. They constantly speak of the need to support the SMEs in the republic, but the monopolization does not allow them to carry our healthy activities," he said. In addition to development of small and medium businesses, Bostanjyan pointed out the need to develop the production field, particularly, the light industry, mining, as well as information-technology industry.  "We have a tangible potential of raw materials and personnel but we do not use it to the full extent.  Our policy is so trivial that we are not even able to ensure the processing here and we export the products to other countries for processing," he added. At the same time, the expert thinks the republic faces the problem of the lack of investors' confidence. In this light, Bostanjyan insists on creating a legislative and legal institution to regulate the investment field, reducing the risks for potential participants. 

As regards the results of Armenia's EEU membership for 2015, the economist said, "No essential changes or positive effects are observed yet, because the Union itself is still in the process of formation. In the meantime, the relations among the EEU member states are not regulated yet. Some time is needed for that".  

To note, World Bank forecasts a 2.2% GDP growth for Armenia in 2016, which is higher than in Azerbaijan (0.8%) and lower than in Georgia (3%). Compared to 2015 World Bank forecasts insignificant slowdown of economic growth from 2.5% and in Azerbaijan more slowdown of rates from 2% while in Georgia it forecasts accelerating of growth (from 2.5%). International Monetary Fund changed the forecast on Armenia's economy growth in 2015 from stagnation to 2.5% growth with further slowdown by 2.2% in 2016. EBRD improved the forecast on Armenia's GDP dynamics in 2015 from 1.5% decline to 2.3% growth  with slowdown of growth to 2% in 2016.

To recall, the Central Bank of Armenia has upgraded its economic growth forecast for Armenia from the previous 2.8- 3.6% to 3.2-3.9%, according to the CBA's monetary policy program for Q4 2015. In 2016, the economic growth will slow down to 1.6-2.7% due to the slackening of growth in gross agricultural output and industry, as well as retention of low expenditures as opposed to the growth in domestic and foreign demand in the light of the expected increase in the transfers from Russia, certain economy growth in the partner states of Armenia and dampening of the monetary terms. 

According to the National Statistical Service of Armenia, in Jan-Nov 2015 as compared to the same period of 2014, economic growth in Armenia fell from 3.8% to 2.9%.  Foreign trade turnover of Armenia in the same period decreased by 20.6% year over year, particularly export dropped by 4.7% and import by 26.2%.