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Economic growth registered in Armenia in the last few years is not fast enough to ease hardship and raise living standards, the newly appointed Finance Minister Vartan Aramian said on Tuesday.

“In order to be able to improve our socioeconomic indicators, we need to have an economic growth rate of at least 4-4.5 percent,” Aramian told reporters. “Growth rates higher than that would naturally mean more rapid betterment.”

The Armenian economy has expanded relatively slowly after a global financial crisis plunged it into a deep recession in 2009. According to official statistics, economic growth slowed from 3.6 percent in 2014 to 3 percent in 2015 and is on course to ease further this year due to an ongoing recession in Russia, a key trading partner.

Nevertheless, Prime Minister Hovik Abrahamian put a brave face on the country’s macroeconomic performance in the last 18 months when he announced his resignation on September 8. He argued that rising exports enabled the domestic economy to continue to grow despite falling multimillion-dollar remittances from Russia and a resulting fall in consumption.

Armenia -- Finance Minister Vartan Aramian at a news conference in Yerevan, 4Oct2016

Armenia -- Finance Minister Vartan Aramian at a news conference in Yerevan, 4Oct2016

Aramian, who was appointed to the new Prime Minister Karen Karapetian’s cabinet two weeks ago, seemed less impressed with those growth figures. “We’ve had a [macroeconomic] shock for two years and need to recover from that shock,” he said. “That should happen in 2017.”

“I think that we will be able to move forward with faster growth afterwards,” added the minister. He stopped short of making concrete growth projections for the near future.

The sluggish growth seems the main reason why Armenian tax authorities will likely fail to meet their revenue target for 2016. The anticipated shortfall might in turn explain why Karapetian’s government plans to cut public spending next year.

President Serzh Sarkisian cited the need to improve the socioeconomic situation in Armenia through more radical reforms when he explained on September 8 his decision to replace Abrahamian by Karapetian, a technocrat and longtime business executive. He said the new cabinet should specifically focus on the domestic business environment.

Karapetian pledged to embark on such “systemic” changes” shortly after his appointment.

Opposition politicians are highly skeptical about the promised reforms, however, saying that the new premier will not end tax authorities’ privileged treatment of wealthy businesspeople connected to the government. They say that the Sarkisian administration will continue to heavily rely on the so-called “oligarchs” for political support.

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