The Armenian government stood by its upbeat growth projections on Monday, saying that the domestic economy is on track to expand by roughly 7 percent this year.
Citing this growth rate, Finance Minister Vache Gabrielian declared that Armenia has finally come out of the steep recession of 2009 caused by a global financial crisis. But he also cautioned, “We have overcome the crisis but not its consequences.”
“We still need to go through a number of structural changes, and it is too early to say that the economy has stabilized. At the same time, the period of crisis and continuous economic decline is already over,” said Gabrielian.
According to Finance Ministry forecasts cited by him, Gross Domestic Product will increase, in real terms, by just over 7 percent in 2012 on the back of a double-digit rise in industrial production and more modest gains in virtually all other sectors of the economy.
“In our view, only one sector will not grow: construction,” Gabrielian told a news conference. “But we think that for a second consecutive year there will be [positive] changes in construction.”
The construction sector was hit hardest by the 2009 meltdown and is continuing to contract. Still, its decline appears to have slowed down this year.
Official statistics put economic growth in Armenia at 4.7 percent in 2011. The government forecast a year ago that the growth rate will fall slightly in 2012 due to a weak global macroeconomic environment. However, President Serzh Sarkisian said in June that it should actually reach 7 percent and told his cabinet to meet that target.
The government expects GDP growth to ease to 6.2 percent next year. Gabrielian explained that the government is taking into account the possibility of renewed global recession. “A second wave of the crisis in Armenia is unlikely, but its possibility must never be ruled out,” he said.
One of the most serious consequences of the 2009 crisis was a sharp rise in poverty. The official poverty rate in the country reached 36 percent by 2010, up from 24 percent in 2008. Gabrielian said last month that the figure fell to 34 percent this year and will decrease further in 2013 thanks to continued economic growth.