By Ruzanna Stepanian
The Armenian economy expanded at a robust rate of 9.2 percent in the first half of this year, creating more jobs and raising the still low living standards, government figures show.According to the National Statistical Service, the country’s Gross Domestic Product was particularly boosted by double-digit upswings in light industry as well as the services, construction and energy sectors. Its data also show Armenia’s net exports growing by 7.2 percent to $340 million and put its average monthly wage at 40,000 drams ($78), 33 percent up from last year’s level.
The head of the service, Stepan Mnatsakanian, said the growth has almost certainly reduced Armenia’s very high unemployment and poverty rates. “We will soon summarize and publish the latest poverty data,” he said. “But it is obvious that there is an increase in the population’s revenues and expenditures.”
However, the reported income rise must have been at least partially offset by a serious increase in the prices of basic foodstuffs and other consumer goods over the past year. The first-half consumer price index was 7.6 percent higher than during the same period in 2003. Besides, this year’s unprecedented strengthening of the national currency, the dram, has somewhat shrunk the budgets of a large part of the population which relies on regular hard currency remittances from abroad.
Analysts will therefore continue to argue that many impoverished Armenians still do not feel the benefits of their country’s relatively strong macroeconomic performance which has been repeatedly praised by the International Monetary Fund and the World Bank. Some of them have long pointed out that, with corporate tax evasion widespread, the bulk of the extra wealth generated by the Armenian economy in recent year has not been taxed and channeled into the public sector.
Mnatsakanian did not deny that social polarization in the country is deepening. “As long as there is income polarization and poverty in our country this problem will always exist,” he said, referring to the uneven distribution of growth benefits. “But in any market economy not everyone benefits from the results of economic growth.”