Monday, October 21 2019 15:06
Alina Hovhannisyan

Artak Manukyan: Armenia may record higher GDP growth rates than the  global average this year

Artak Manukyan: Armenia may record higher GDP growth rates than the  global average this year

ArmInfo. The decrease in demand in foreign markets is more noticeable for the economies of countries with commodity dependence, while countries whose priority  is the service sector will be more resistant to external shocks.

On October 21, this was noted by an economist, lawmaker of the National  Assembly of the Republic of Armenia from the My Step faction, Artak  Manukyan. Nevertheless, according to him, the successful economic  performance of these countries will largely depend on the economic  policies of states in terms of the level of investment policy and the  strengthening of infrastructures.

''Given all these factors, this year Armenia has the opportunity to  record higher growth rates than the global average. In particular,  over the past 5 years, the average growth of the world economy  amounted to 2.89%, while in Armenia this indicator reached 3.94%.  Over the past 5 years, we have managed to develop somewhere by 1.1%  point faster than the world'', the MP said.

At the same time, referring to the 4.9% economic growth projected in  the RA budget for 2020 against the forecasted growth of the global  economy by 3.5%, Manukyan noted that in comparison with the global  situation, the growth rate of the Armenian economy is higher .  However, if we consider this indicator from the point of view of  desires and potential, then, of course, the country has a significant  untapped potential.  To ensure double-digit growth indicators,  according to the MP, it is necessary to create prerequisites that are  possible only if invested in social and other infrastructures. In  this vein, Manukyan referred to the expenditures of the state budget  for 2020, where, as he noted, important messages are contained, in  particular regarding infrastructure investments - roads and human  capital. "The expenditures are aimed at achieving higher economic  growth in the future," he stressed.

To note, according to the draft state budget for 2020, the country  plans to implement ambitious infrastructure programs, increasing both  current and capital costs. With a projected budget deficit of 2.6% of  GDP, capital expenditures will amount to 5% of GDP. The level of tax  collection is projected at around 22.6% of GDP and will become 0.3%  points higher than in the revised budget for 2019.

This year, in connection with the reorganization of the management  system in the direction of greater cost- effectiveness and the  neutralization of corruption risks, the government has seriously  underperformed the capital expenditures program. Since the beginning  of the year, the surplus of funds amounted to 100 billion drams (1.5%  of GDP). It should be noted that the World Bank improved its forecast  for GDP growth in Armenia for 2019 - 5.5%, with a slowdown in 2020 to  5.1%, and by 2021 the expected growth rate was maintained - 5.2%. The  IMF predicts a 6.0% increase in Armenia's GDP in 2019 with a slowdown  in 2020 to 4.5%. The Central Bank of Armenia predicts for 2019 GDP  growth in Armenia in the range of 6.7-7.2% (against the actual 5.2%  in 2018). The state budget of the Republic of Armenia for 2019  contains a growth of GDP of 4.9%.

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