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Economic growth in Armenia reached 4.4 percent in the first half of 2015 contrary to gloomy forecasts made by international lending institutions earlier this year, Prime Minister Hovik Abrahamian said on Monday.

Abrahamian cited the latest macroeconomic data from the National Statistical Service (NSS) during a weekly cabinet meeting in Yerevan. It shows that year-on-year growth accelerated sharply from 2.5 percent in the first quarter of the year to 5.1 percent in the second quarter.

Armenia - Prime Minister Hovik Abrahamian speaks at a cabinet meeting, Yerevan, 31Aug2015.

Armenia - Prime Minister Hovik Abrahamian speaks at a cabinet meeting, Yerevan, 31Aug2015.

The reported growth rate primarily resulted from an almost 15 percent surge in agricultural production and a 5 percent rise in industrial output registered by the NSS in the first half. The Armenian agricultural sector’s strong performance was made possible by very favorable weather conditions. Armenian agricultural exports rose by more 50 percent in physical terms January-June.

However, these strong gains contrasted sharply with a 5 percent year-on-year drop in retail trade. According to the NSS, the volume of Armenia’s foreign trade shrunk even more drastically in the same period. The government’s first-half tax revenue was also down.

Armenian analysts critical of the government will seize upon these decreases to question the credibility of the official growth rate announced by Abrahamian. They have already dismissed the premier’s repeated upbeat statements on the economy made for the past few months.

Both the World Bank and International Monetary Fund revised downwards their macroeconomic outlook for Armenia this spring, citing spillover effects of a deepening recession in Russia. In June, the bank forecast a growth rate of only 0.8 percent, while the IMF said that the country will likely post zero growth in 2015.

Abrahamian insisted in May that the Armenian economy will grow by “at least 2-3 percent.” He said that the government could even succeed in meeting its 4.1 percent growth target which was set late last year.

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