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Economic growth in Armenia will slow down to 0.5 percent this year, falling well short of a government target, Finance Minister Vartan Aramian said on Friday.

The government had expected Gross Domestic Product to increase by at least 2.2 percent in real terms. Official statistics put the Armenian economy on track to expand at such a rate until President Serzh Sarkisian changed his prime minister and roughly half of the ministers this fall.

The National Statistical Service (NSS) reported earlier this month that the economy contracted by 2.6 percent in the third quarter of 2016.

Aramian, who was named finance minister in late September, attributed the slowdown to a revision of Armenian agricultural output calculated by the NSS and other government agencies. He said it exposed a double-digit decline in the agricultural sector.

“We want to make the calculations more objective and precise,” Aramian told journalists. “That is why we anticipate an economic growth rate of 0.5 percent this year.”

Growth was also dragged down by a continuing fall in remittances from Armenian migrant workers in recession-hit Russia and other countries, which has been suppressing consumer spending. A more than 6 percent rise in Armenian industrial production predicted by Aramian is clearly not enough to offset its negative impact on economic activity.

In Aramian’s words, the domestic economy has been hamstrung by “external shocks” for the past two years. “I think that we are now seeing the end of those shocks,” he said. “The year 2017 will be a period of recovery.”

“We must do everything to lay the groundwork for faster economic growth in 2018 and 2019,” added the minister.

Prime Minister Karen Karapetian’s cabinet has forecast a growth rate of 3.2 percent for 2017. The World Bank made a similar growth projection in a report released a month ago.

“As the global economy rebounds and Russia’s recession passes its nadir, economic activity in Armenia is expected to moderately accelerate over the medium term,” said the report. It warned at the same time of “considerable downside risks” for facing the country.

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