Prime Minister Hovik Abrahamian and his newly formed cabinet offered a less upbeat outlook for economic growth in Armenia than the previous government in their three-year plan of actions adopted on Monday.
The policy program, which the National Assembly will begin debating on Tuesday, says that the Armenian economy will grow by an average of 5 percent annually in the next few years.
A similar program drawn up by former Prime Minister Tigran Sarkisian’s cabinet and approved by Armenian parliament last year forecast annual growth rates of between 5 and 7 percent. Armenia’s Gross Domestic Product increased, in real terms, by only 3.5 percent in 2013, according to official statistics.
The previous government came up with a 5.2 percent growth forecast for this year. The World Bank made a virtually identical projection in March. It cautioned, however, that growth could come in at 4.5 percent in case of external “downside shocks,” notably a “protracted weakening of the Russian economy.” The International Monetary Fund too has cited the negative impact of slowing growth in Russia on the Armenian economy, saying that it will expand by only 4.3 percent in 2014.
The new government’s program similarly acknowledges the downside risks emanating from Russia, including as a result of Western sanctions imposed on Moscow. In that case, it says, Armenia’s macroeconomic performance will fall short of the set targets.
Unlike its predecessor, which pledged to help create over 100,000 new jobs by 2017, Abrahamian’s cabinet set no concrete employment targets. It did promise, though, that the official poverty rate in the country currently standing at roughly 33 percent will fall by 10 percentage points in 2014-2017.
“For every Armenian, the homeland will become a safe haven for making the most of their potential and experience and skills acquired in various parts of the world,” Deputy Prime Minister Armen Gevorgian said as he presented the program to fellow cabinet members. Gevorgian, who also served in Sarkisian’s cabinet, said this requires the creation of a business “environment ensuring equal conditions and real competition.”
Abrahamian has repeatedly pledged to markedly improve the investment climate in Armenia since being appointed prime minister last month. Opposition politicians brush side these assurances.