Economic growth in Armenia will fall short of government projections and slow down to 4.3 percent this year, the International Monetary Fund has forecast in its latest World Economic Outlook.
The IMF expects a further slight drop in the growth rate next year, saying that Armenian economy will likely expand by 4.1 percent in 2014.
“Growth in Armenia will moderate to about 4.25 percent during 2013–14 compared with more than 7 percent in 2012, as a return to more normal weather conditions, a slowdown in credit expansion, and a continuation of fiscal consolidation bring the economy back toward trend growth,” the fund says in its extensive global report.
A nearly 10 percent rise in Armenian agricultural output reported by the government was a major a major factor behind faster GDP growth in 2012. The economy also benefited from strong gains in industrial production and services and some signs of recovery in the domestic construction industry.
The construction sector is still reeling from the 2009 global financial crisis that caused Armenia’s GDP to shrink by over 14 percent. This led to a sizable rise in poverty. Economic growth in the country resumed in 2010, accelerating to over 4 percent in 2011 and to 7.2 percent in 2012, according to official statistics.
The Armenian government forecast a GDP growth of over 6 percent in its budget law passed by parliament last December.
President Serzh Sarkisian set an even higher growth target for his cabinet after winning a second term in office in a disputed February 18 presidential election. He said in March that the government must make sure that the economy continues growing by at least 7 percent annually in the next five years.
Speaking at his inauguration on April 9, Sarkisian declared ensuring faster economic development and reducing poverty in Armenia his top priority.