Friday, October 7 2022 12:17

ArmInfo.Armenia's government is working to develop the country's economic potential, Minister of Economy Vahan Kerobyan said in an interview with CivilNet. 

An economic modernization programme was launched early this year. The  first component provides for compensation of companies' investments,  leasing development, subsidizing loan interests. 

Over 300 companies have benefited from the programme. By the end of  this August, Armenian companies had purchased equipment worth a total  of AMD 20bln. 

"This is only the beginning. We see the programme is a success, with  more and more companies purchasing up-to-date equipment enhancing the  country's economic potential," Mr Kerobyan said. 

The government is also raising the human capital level, assisting the  people that relocated to Armenia and are contributing to the  country's economy, especially to the IT sector. 

The measures are aimed at enhancing the productivity and ensuring  high economic growth in the coming years. Special attention will be  paid to the potential 6-7-fold increase in productivity, which will  make Armenian companies' products will be competitive on  international markets. 

The measures to increase the level of productivity of the economy,  however, face some risks. First of all, these are currency risks  associated with AMD appreciation. The exchange rate of AMD 450/$1  should have been minimal, and today it is equal to 404-405 drams,  which is a serious problem for exporters of products and services.  Nevertheless, in the first half of this year, instead of the planned  state budget deficit of AMD 130bln, the government managed to reach a  surplus of AMD 72bln, which also contributed to appreciation of the  national currency. He expressed confidence that as a result of the  implementation of the program of significant capital expenditures, it  would be possible to reach an acceptable level of the exchange rate.  The minister expressed hope that with the growth of productivity, it  will be possible to significantly neutralize the negative impact of  the strengthening of the national currency.

Kerobyan did not agree with the prevailing opinion that the growth of  the country's economy was mainly promoted by international visitors -  relocators from Russia and other countries. "It seems that apart from  them we do nothing ourselves, which I categorically disagree with,"  said the head of the Ministry of Economy, adding that the growth of  the country's economy is largely due to an increase in the share of  the processing industry, the growth of which in January-August of  this year exceeded 30%.  Kerobyan noted that there have been serious  changes in the structure of exports, in which the share of the mining  industry has decreased, which has decreased from the previous 60% to  30% of total exports. In turn, the share of exports of high-tech  products increased from 10% to 20%.

It should be noted that in Armenia, the growth of economic activity  in January-August 2021 accelerated to 13.9% per annum (from 4.9% a  year earlier), accompanied by a high growth in exports and imports.  In August this year. by August 2021, economic activity accelerated  growth to 18.5% (from 2.3% a year earlier).

According to statistical data, the growth of economic activity in  January-August 2022 was largely determined by the service sector - by  27.1%, the energy complex - by 16.6%, the construction sector - by  14.2%, the trade sector - by 13.6%, and to a lesser extent, the  industrial sector - by 9.2%.

At the same time, the World Bank (WB) recently improved the forecast  for Armenia's GDP growth for 2022 from the previous 3.5% to the  updated 7% - this is higher than the IMF's expected 5%, slightly  lower than the EBRD's forecast of 8% and much more modestly announced  by the Central Bank of Armenia 12.9 %.